Yesterday’s announcement by Rip Curl that the iconic surf brand will be sold-up raises questions about what happened to Australia’s most iconic surf brands. The fact that big three surf brands Rip Curl and Quiksilver are experiencing shrinking sales and growing debts has well report. Surf-branded clothing is becoming less popular among suburban consumers. Combined with the rise in online shopping, there are increasing doubts about the viability of corporatised surfing brands.
The surf industry is definitely affect by raw economics. Recessions in America and Europe have hit the big three most hard. They have concentrated their retail investments there. It was terrible timing. Quiksilver, like Billabong, expanded their business operations just before the GFC. Billabong purchased a large number of surf retail outlets. Quiksilver bought a number of non-surf leisure brands, including Rossignol skis, and Cleveland Golf equipment, and had to sell them. When retail returns disappeared, expansion led to huge debts that were difficult to finance.
A Subcultural Surf Industry
Understanding the surfing subculture can help us understand the problems faced by the big three. The selling of surf is strongly influence by the subcultural values and fashion cycles in the surfing scene, which began as a simple way to shape boards in backyard workshops or tool sheds.
Our new book on surfing, which will published by University of Hawaii Press next year, argues that it is a subcultural sector define by tension between large corporate labels and smaller independents. Independent labels are more credible because they are closer to surfing culture’s grassroots. They often have their headquarters in certain surf regions, such as southern California, the Gold Coast and north shore O’ahu, where strong surf subcultures thrive.
Brands become corporate entities when they grow and expand. In 2000, Quiksilver was list on the NYSE and Billabong was list on the ASX. This marked a dramatic shift in the structure of the surf industry. Many surfers believed that capital growth and profitability were more important than satisfying their needs and wants, rightly or wrongly. Surf companies have increased production, acquired smaller brands and opened flagship retail shops. They also supply stock to departmental stores. Quiksilver supplies its surf-wear to Macy’s in America and David Jones in Australia. To increase market share, shareholders should paid dividends. It is essential that brands are visible to the masses. This undermines the brand’s claim to serve local roots and meet the needs of everyday surfers.
Sub Mining Surf Credibility
Companies can now sell surf products to a wider audience by marketing the cool image of surfing. Despite its location, the US Mid-West region saw a staggering $457 million in surf retail sales in 2010. Selling surf-wear in department stores reduces scarcity and subcultural values. Brand credibility suffers.
This isn’t a new concept. This is not a new concept. In the 1960s surf, brands Ocean Pacific and Hang Ten successfully expanded from board shorts and surfboards to other types of swimwear and surfwear. Subcultural affiliation fell apart when their products were moved from surf shops to department stores in the 1980s. It seems that the big three are moving in the same direction.
Other independent labels can fill in the gap when scarcity value has been lost. They are more genuine and responsive than their competitors. It is harder to find their surfboards, clothing, and apparel, which increases the scarcity value. Independent brands are rooted in surf cities and regions. Corporate companies, however, seem unreachable and uncool. The majors, in turn, will swallow up smaller, less well-known independents over time as was the case with RVCA, Palmers and Dakine, temporarily increasing their street cred. The cycle continues, but it’s not over.
Divergences And Differences
Although the three major surf brands are clearly in trouble, it is not fair to assume they are all equally at risk or will fail. Quiksilver is list as Billabong. Future business planning will be influence by the responsibilities of shareholders and investors. Quiksilver and Billabong will not be restructure, nor will they be able to regain their subcultural appeal. This is evident in the recent appointment of Launa Inman, former CEO of Target, as Billabong’s head.
Rip Curl is, however, still privately owned. It is unclear if this gives Rip Curl more freedom to continue doing business in a way that maintains credibility and profitability. Rip Curl’s strategic focus remains on hard wear, which is wetsuits, and surfboard retail. Rip Curl is still profitable, despite a dramatic drop in sales over the past 12 months.
Surfing Industry, Surfing Subculture
The performance of Australia’s biggest surf brands has been affect by broader economic conditions. However, macroeconomic conditions are not the whole story. Surfing is not a market for mass-produced consumer goods. It’s a subculture. Surf products and equipment will continue to be in demand due to Australia’s strong connection with surfing. Newer, more innovative brands will rise and compete for market share. It will be fascinating to see how the big three Australian companies adapt to subcultures. The key to understanding capitalism lies beyond the mall. It is important to observe the subcultures that make up its subculture.