Market Intelligence - Febr/March 2008

18 Apr 2008

United Kingdom
BY DAVE ‘DC’ COLWILL

Suffering from SAD?
Whether it’s Seasonal Affected Disorder or Sales Affected Disorder now’s the time to turn that frown upside down! Yes folks spring is here. Roll out the racks of flip flops and freshen up the store with that bright new summer stock. You thought the sun would never shine again, well being wrong never felt so good!

Seriously, if you are a snow, skate or streetwear retailer you’ve probably had a good winter. Hard work... but you are up on last winter. You’ve worked on customer service, kept your retail space fresh, re-ordered on lines, which worked well, and played your cards close to your chest, but all the time looking after the customers coming through the door.

Spare a thought for your coastal cousins in the surf market who’ve seen more gales, gusts and squalls than customers. Many of those retailers I spoke to struggled on all aspects from clothing to hardgoods, to the point that many will be reducing forward orders in favour of taking their chances on in-season stock buys. The fact that so many brands offered early season discounts seems to have made the choice an easy one to make.

With adversity comes invention and this season has seen the launch of an innovative online tool. Wetsuitfinder.com is a price comparison site specifically for the UK, it lists various makes, models and thickness of suits, then clicks directly to retailers for them to close the deal. Help for surf retailers who are lacking a customer or two?

A Quiet Word With The Man From TSA
Adversity is not a word I’ve been hearing in the Snow market – it’s been drowned out by all the champagne corks popping! Figures have been good with outerwear seeing one of its strongest seasons on record. I caught up with Jeremy Sladden of The Snowboard Asylum (TSA), one of the UK’s most influential snow retailers to find out more.

“Board sales have been consistent from August through December coming in at almost the exact same levels as last year, however, since the New Year we have seen big increases and by the end of the year we should be up 300/400 units on last season. Boot sales have not been so strong but last season was our best ever, so we expected it to be down. Clothing sales have remained strong throughout the season and will come in with a healthy growth over last year.”

According to Jeremy, “the amazing snow fall early in the season had very little effect, however come the New Year, when people could see that there was still good snow in the Alps, sales really started to rise.”

Of course it’s not just the snow that drives sales, you need to have the right product in store. On hardgoods less conventional brands such as Bataleon, O-Matic and Signal are snapping at the heels of the established market leaders. Softgoods are still the domain of Burton, Bonfire and Westbeach but Vans technical wear is upping the ante for the 08/09 season.

“One interesting trend we have noticed is that people are becoming a lot more aware of the fact that you don’t have to spend a fortune on snowboard to get one that works. With manufacturers upping the spec of mid-range boards so much, the bang per buck ratio is very quickly spinning towards £300 boards.”

So a successful season at TSA, are they doing anything differently that other retailers?

Jeremy thinks so, “I think we are a lot more creative than most other snowboard shops, our brand portfolio is a lot more interesting and core than our competitors. We are 100% committed to rider-owned and rider-driven brands plus we are active in the UK scene from the AIM series through to the production of free DVD’s. We believe that it is crucial to put back into the sport a big chunk of what you take out.”

A Quiet Word From The Shows
With all the cost, hype and marketing from the recent round of tradeshows now over, the Sales and Marketing bods will be counting the beans and wondering if it was all worthwhile?

While many were shedding notes in hotel bars around the continent, a series of shows has been quietly doing the job for many core Snow and Skate brands back in the UK.

The Snowbaw tour is a series of no-nonsense, order-writing showrooms involving the likes of Westbeach, Sessions, Nixon, Arcus, K2, Adio, Lakai, Salomon and many more. The series is organised by the co-operative of brands involved, which has created a relaxed environment perfect for retailers to get to grips with their seasonal buys. The show hit up four locations around the UK, Edinburgh, Leicester, Bristol and Ascot - feedback from retailers and brands has been extremely positive.

With the success of 2008 it seems certain that the tour will become staple in retailers diary’s over the coming years. After all, a long-term view is at the heart of Snowbaw. One of the reasons for organising the tour is to give retailers a ‘Local’ show option, limiting the amount of travel and subsequent carbon emissions (and costs) that are created by individual brand showrooms.

In Other News
In other news Victoria Ford, former head of sales at Circus (Paul Frank, Vestal and Sanuk) is now ringmaster, sorry, director of newly-formed Ilove Distribution, UK distributors of Paul Frank, Penguin Sunglasses, Modern Amusement Sunglasses and 80%20 shoes. For enquiries call 0845 299 0779 or visit www.ilove.uk.com

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France
BY IKER AGUIRRE

Allez La France!
French workers are never too far from a strike and the end of 2007 was no exception. Led by public transportation strikes, the country was struck down by public state employees who consider their exceptional privileges still insufficient. “Egalité? Fraternité? Mon cul...” Returning from Ispo was another headache and striking taxis in Paris made it practically impossible to travel other than by foot, tube or bike.

In the meantime, another topic of much discussion was Air France’s cancellation of all flights from Paris Charles de Gaulle (CDG) to Biarritz. These were usually packed and last minute reservations often impossible. Then, low cost Easyjet arrived - Paris-Biarritz 38 Euros, monsieur? What would Air France do? Other than cancelling the line. Most international connections in France take off from CDG. Yet today, the only way to fly into Paris from Biarritz is either through Orly, a hour away from CDG when there are no traffic jams (or strikes), or through EasyJet (whose prices have gone through the roof since they are now the sole provider) and suffering multiple check-in queues and never-ending layovers.

Needless to say that most of our European surf industry now relies on less than practical connections to the rest of the world (two-hour drives to Bordeaux or Bilbao, several connection flights to CDG through Lyon or Clermont-Ferrand, airport transfers, etc.). Awesome, we’re loving it!

Climate Change, Monsieur
Many folk out there are burning candles, praying, or reading Magic for Dummies in a desperate move to try and change something that seems to be inevitable: changing weather patterns. Winter came on time at the end of ‘07 and many faces showed some kind of relief - the most optimistic even dared smiling! At the end of January the Pyrenees were drier than Africa, with mimosa trees blossoming in early February. The story wasn’t that pathetic in the Alps even though by mid-Feb snowfalls where a long-gone souvenir.

You’ve read it many times, so I won’t write it again: no snow= no business. Some start talking about a crisis status in the industry, a painful experience if that is the case, as an industry we have never faced a true crisis. How will we cope with such an economic situation used, as we are, to continuous growth? How are we as an industry going to accept flat growth as a synonym of victory in a market share battle? There is a dark cloud looming over our industry today and we’d better be prepared to fight because there are many signs proving we are entering a crisis. Sell through problems, stock levels, increased number of close out dealers becoming key/major accounts, stock market performances way below historic industry average, public capital leaving the industry, reduced number of target retail locations, decreasing number of doors... Call it climate change or pessimistic anticipation but we’d better all cover our asses because there is a looming war in the works, only the strong will survive - and believe me, there will be no mercy.

EuroSIMA Cluster
From January 1st 2008, the Boardsports SPL and the Competitiveness Pole have merged within EuroSIMA to form the EuroSIMA Cluster. It aims to promote and develop the boardsports industry in Aquitaine through collective actions between institutions, companies, training and research centres. The EuroSIMA Cluster acts as an organisation designed to bring together private individuals and institutions to start and/or improve European boardsports industry projects more rapidly and enable companies based in Aquitaine, France to pursue their development and growth. Christophe Seiller, former administrator of the Boardsports SPL in Aquitaine, will manage the EuroSIMA Cluster.

French Market Sucks
Tradeshow and pre-book season, that’s where we’re at, Yoo-hoo! While Bread and Butter attracted up to 99,000 people and winter Ispo kept its visitor numbers up to expectations, there was a common murmur in the aisles - very few French retailers made the journey to shows anywhere! The general feeling in retail is pretty gloomy. Sell through was obviously better than last season, well, it couldn’t be worse or we would be selling sandals in ski resorts, but far from marvellous. Last season a 40-50% decrease on pre-books was the average. This season things look better though. We are talking of only a 20-25% decrease on top of last year’s. Believe me we are at that point: no growth = success = market share growth.

Erratum
In our last issue one of our guys interviewed some guy from Ride Spirit in Paris who ended up not being who we said he was. I should have known better, since it is in the public domain that Nicolas Bouchou is the head honcho of all snow-related operations there. Apologies Nicolas et al.

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Germany
BY BENNI MARKSTEIN

The overall mood in the German boardsports market seems to be on the re-bound, especially because consumers seem once again to be willing to spend after a long period of counting their pennies. Shops report a demand for higher quality and customer service. “Our major sellers reflect a love for detail with an overall distinct finish. Quality is definitely playing a huge role again,” said Alex Schmitz, Zupport Skateshop in Trier. Hot brands in the softgoods sector currently include Matix, Red Dragon, Innes and clothing by Emerica. As Mario Schofs at Westside store in Duesseldorf points out, “The market is gaining momentum in the high-price segment, among other things, Gore-Tex products. And while many customers will collect product information on the Internet, they end up in core or specialised retail outlets to make their purchases.”

Trends 2008
Guess what? Vulcanised shoes are still the big ticket in footwear (see this issue’s Skate Shoe Report, Ed), included in pretty much all collections thanks to continuing high demand. This appears to be mostly a matter of style preference, since most hardcore skaters seem to be having problems with the relatively thin soles and low overall durability of these shoes and are, instead resorting to more solid footwear options. Speaking of solid, Vans are still selling big across the board in early 2008 and when it comes to softgoods the overall trend is nicely summed up in this short statement by Element sales rep, Andre Wienkamp, “Stripes are definitely played out!” In 2008, individuality and innovation will be major factors and even if H&M and the like are banking on exactly the same styles the “strong brands are still selling well, pants are heading towards a looser fit again and V-necks are definitely up and coming!” Wienkamp continued.

In the hardware sector Spanish brand Jart skateboards is improving further, with their decks in constant demand. The main reason, according to Martin Dockenfuss at Pivot Distribution, lies “in the great margins for the stores. The quality is at least as good, if not a ‘lick’ better than what American brands have to offer.” Martin further cites the brand’s great price/performance ratio, as well as solid designs and shapes, which cater to core consumers and younger kids at the same time, “and overall we are seeing a greater awareness for European brands.” The future of European board manufacturers will remain an interesting story, especially the development in countries where national brands are seeing constant growth, such as Blueprint in the UK. Nevertheless, market leadership in the upper segment remains with US brands, namely Element, Zero, Flip and Alien Workshop.

Dealers
The headquarters of Earth Products in Muenster have shut down. All European countries that had received their shipments of Adio Footwear and Planet Earth Clothing from here will now receive their packages directly from the US or Asia.

The folks at R.O.U.G.H. distribution are expanding their brand-portfolio. Innes Clothing (formerly supplied by 24/7) will be shipped by the distributor in Bodelshausen starting in Autumn 2008. Another addition is streetwear label Nomis, headed by designer Simon Chamberlain (www.nomisdesign.com), who recently introduced the brand’s first outerwear collection. Also starting shipment in the autumn will be the streetwear and outerwear label, Sound (www.soundsnowboarding.com), run by Marc Frank Montoya.

Over in Muenster, the Titus brand is celebrating its 30th anniversary. Next to special anniversary skateboard decks, there will be a small soft goods collection as well as a couple of store events at franchises across the country and some interactive treats on www.titus.de. And since 30 years in the business is an achievement worth celebrating in style, a major bender is scheduled for December. This is going to be a double-whammy, not only toasting the company anniversary, but also the 60th birthday of its founder and namesake, Titus Dittman.

After 10 years in sports marketing at Adidas, Ricarda Kuypers is heading over to the Sales group at Footlocker Europe in Amsterdam. Her place will be taken over by Jascha Muller - a solid instalment on the Adidias skateboard team since 2000 and the company’s German skate team manager since 2003. She will be taking on team manager responsibilities for the whole of Europe, as well as marketing activities in the BMX and Parcours segments. Jascha is also an avid filmer and currently working closely with Torsten Frank on the Adidias skateboard video scheduled for release in 2009.

In the town of Emmendingen, Dave Duijkers has opened his store named Rollbrett Mission. Anyone familiar with the skateboarding scene in Germany’s Schwarzwald region will know Dave as a passionate skater and a kingpin of the scene who has been running the website www.boardmag.com for the past few years. The store’s very own skate library consists of over 700 magazines and books from over three decades of skateboarding, while the skateboard museum displays a number of rare treats from skateboarding’s rich history.

Associations
With the newly founded German Skateboard Association (GSA), skaters across the country can now count on a new representative body to voice their interests. Fronted and admirably supported by two of Germany’s most influential and well-connected skaters, Tilman Goedel (German delegate to the ESA and President of the Association for the Advancement of Youth Culture) and Nils Gebbers.

The association will be mobilising the experience and expertise of its members in helping local communities in choosing contractors for building new parks, as well as financing indoor parks and events and helping out with insurance problems and the like. The official inauguration and first assembly of members will take place at the summer edition of Bright in Frankfurt. More info at www.gsa-skateboarding.de

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Austria
BY UWE BALLON

While public smoking is now an official offence in Germany, Austria has yet to resort to such measures and Germans are flocking to Austrian resorts in order to continue their banned addictions. Slopes are full and restaurants and hotels are fully booked. Local in-resort dealers are more than happy about the large amount of money being spent, as Peter Brandl from La Resistance in Zell Am See confirmed. Softgoods and hardware are selling like hot cakes in shops, and the tourists often have enough money left to acquire extra clothing to look their best for a night on the town.

Competition with mega-stores who tempt customers with set-ups and sale offers, sometimes before even having the goods to back up their claims, has long been laid to rest. Many shops in Austria, including Absolute Radical in Liezen, are reporting that customers are flocking back to core shops and are demanding the sort of care and attention - not to mention niche brands,
customer service and trustworthy image - that the mega-stores just do not offer. Hardware sales are, in particular, driving this trend and over at Frontside Air in Imst, Annemarie Pechtl, cites boot-fitting services as an excellent example of this trend. What is the point of selling a customer a boot at a discount price, only for them to find out when they hit the slopes that it isn’t the right boot for them.

Unfortunately many dealers, as well as the entire snowboard industry, are still affected by the aftermath of last winter’s bad results. Reps are complaining about order cut backs for the coming season, and because the ‘in’ shop of town can’t always afford to buy up the entire stock, efforts are being made to sell to alternative, mainstream stores as well as core stores.

Come this spring the white of Austria’s slopes will have been replaced by the green of it’s football pitches, as the Euro 2008 comes to towns across the country. While some shops are looking forwards to being along one of the many ‘Fan Miles’ prepared for the thousands venturing to Austria, others like Adi Rauschers from X Double in Innsbruck, fear that this newly created football hype will inspire teenagers to choose the ball, rather than the board.

All the same, many Austrian skateboard retailers like Tim Dyson of Vienna’s Fame Boardshop, are looking forward to a prosperous season and judging by the complete board sales of last autumn, a new generation of young customers. Due to the construction of skateparks like Vienna’s new bowl paradise in Hutteldorf and Linz’s freshly finished pool, older skateboarders also have a reason to go out and invest in a new set up.

While creating profitable margins for the shops, US brands have at the same time become more affordable for the average skateboarder and, as a result, are able to compete with shop boards as well as blank board prices.

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Italy
BY RITA COMI

Snow is to the Italian snowboard market what steroids are to certain Hollywood action stars: without a constant fix of the former, the latter tends to fall apart.
Poor sales from last season and the worryingly few centimetres of snow on the slopes, has opened everybody’s eyes on the frailty of almost all facets of the whole Italian snowboard business - from the lack of entrepreneurship of many shops operating in the sector to the short-sighted policies for profit of some distributors. Not to mention the incapability of the resorts to handle the negative press that emerged in the national Italian media! Not even our Italian natural enthusiasm could keep us going when things were forecasted with such gloom!

Despite this less than favourable environment for healthy business growth, some entities have managed to grow and have indeed proved to be extremely lively. Fast-growing Option distribution, already in charge of developing brands like Insight, Rome, Dragon and Lifetime, has upgraded its status from Italian distributor to European distributor for Grenade.

On a similar note, from next season Eleven clothing will be available in the Italian market thanks to Free On Board distribution. Eleven’s marketing director and Source contributor Leandro Davies was won over by the energy and enthusiasm that the new Italian distributor is ready to inject into the Swiss brand. Eleven will stand side-by-side at FOB with Bataleon, Celsius Boots, IS Design and I-Found.

On the retail side the shops that proved to be more successful and reacted most promptly to last year’s crisis were not just the ones who not only applied a well-defined commercial strategy (investing in long-term relationships with brands) but also those shops who stepped into new marketing territory and actively began to involve their customers. A good example comes from Deka shop who, in the low season, organised DJ sets in collaboration with the brands sold in the shop or similarly core shop, Neuro Shock, which hosted a 1-star TTR event.

This season events have seen snowboarding and free-ski coming closer together as most snowboard competitions also had a free-ski category. The young and thriving free-ski scene is beginning to show consistency and event organisers have been among the first in Italy to acknowledge this. Italy has a long and well-established tradition of ski clubs and in 2008 these clubs had more than 20,000 kids aged between 13 -21 registered, many of whom can’t wait for their alpine training to finish to then go jumping. Brands like Nike, Salomon and O’Neill have already started to invest (in these clubs), although many of the other traditionally snow-related companies are yet to fully understand the (crossover) potential.

One of the most talented and greatest kids in Italian freeski, Daniele Mottini, was caught in an avalanche in his home resort Livigno that buried him under five metres of snow. Daniele was only 15 and he had a whole, bright life ahead of him. Many of us here still cannot come to terms with his death. Our thoughts go out to his family and friends.

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Sweden
BY PELLE JANSSON

The Show Must Go On
Phew... I survived the hectic trade show period this time and feel totally burnt out at the moment (don’t we all, Ed?) and this time I didn’t even go to BBB or Bright; instead I focused on the national tradeshows in Sweden and I’m glad I did.

For the second year in a row The Boutique Fresh Show (BFS) took place in central Stockholm at the beginning of February. The show has increased over 300% in size since last year and this time 31 exhibitors representing over 100 brands were present. The number of registered visitors was more than 1,300 – a number that competes with Sweden’s established annual sports trade show, Swesport.

The instigator of the BFS is Jonas Wiehager, owner of the brand ‘¥our $weden £uxury’ and Sweden’s most recognised streetwear store, Boutique Sportif. His answer to the question, why this show, is as simple as the question itself, “To give businesses here in Scandinavia something they didn’t know they wanted. And I think we’re successful in that. People are doing business here, shops are actually writing pre-orders and that’s something that has become very rare at trade shows (in) the last decade.”

Exhibitors and visitors seem to be equally satisfied with the show. New brands were picked up and new stores were found and a lot of time was saved. Branco Perkovic is co-owner and managing director of the biggest e-shop (for clothes) in Sweden and summed up the show by saying, “We spent one day here and that saved me and my staff at least two weeks of work and travelling. If Jonas can manage to get 50 more brands in then I don’t think we have to go to any other shows at all.”

Don’t think that the BFS is just a Swedish show. I heard German, Norwegian, Finnish and Danish being spoken and 20% of exhibitors came from outside of Sweden. The BFS will be back this summer but at the moment the dates are not fixed, they’re waiting for other national and International fairs to set their dates to avoid colliding with them and to ensure synergy with the other shows. Jonas Wiehager is also not yet sure if they will be at the same location at Hotel Anglais right in the centre of Stockholm either, “We want to stay here since working together with the hotel has been very smooth. But at the same time it feels like we’ve already grown too big for this venue. It’s not possible to expand that much more here.”

Delicate problems for the Boutique Fresh Show!

Pelle Jansson is the Art Director of the sport trade magazine ‘Sportfack’ in Sweden. He started to skate 1977 and stepped on his homemade snowboard back in 1983. This winter Ispo was his 18th straight in a row and he considers it as one of the best through the years.

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Spain
BY IVAN MORENO

Did Someone Mention a Crisis?
Unfortunately Spain is no longer unique. A state of crisis has arrived with some local flavours such as the sinking housing market (40% of estate agencies have closed this year), general elections, and many families squeezed by large mortgages for tiny flats.

It is generally accepted that Spain’s economy will grow less than previous years, forecasters have estimated growth in 2008 to be as little as 3%. However for the long-term situation the picture is even darker and could become even worse if important decisions are not rapidly taken concerning education, a more flexible labour market and a sharp increase of companies’ competitiveness.

Just now the situation here in Spain is that we can all see the crisis very clearly and although we all know that it is something serious, the economy is not sinking yet, though how long we can keep saying yet is a mystery to us all.

Snowboard: Exile In Main Streets
Risky business the snow business - high prices, small margin for the boards, unstable weather for the technical clothing plus too many new brands jumping around a suspicious shop owner who has little room for them all. As a result we will probably see how snowboard material is exiled to big shops and ski station shops and this could spell the end for many of the smaller ‘urban’ shops.

Many local brand’s projects have been delayed in order to wait and see how things develop. However, it would be unfair to forget that the Spanish ski stations have probably the best natural conditions for snow parks and more sunny days than their other European counterparts. But where is the snow?

Skate: The King Of The Boards.
We’re going to forget for a while the cruel Crisis Mistress. The skate panorama is, compared with the other sectors, amazing. Local brands are finally being accepted and small urban shops are falling in love with the stable, all weather skate market. American brands are lowering prices.

Having already conquered the market, Nomad Skateboards and Jart are having to fight it out to see who’s top dog. The rest playing catch up include Alai, Eina and Cabra although doing well, especially Cabra, they have a way to go to catch up with Nomad and Jart. Spanish skaters are also enjoying a host of new superb local pro-teams. American skate icons Lee Smith and Henry Sanchez, have just signed to join Nomad, while Bastien Salabanzi has joined Jart.

On the other hand, you cannot find efficient skater associations or any kind of support from the public sector, which is busy subsidising the overpaid football players and it’s clubs whenever they need something. As a result, the skate brands are in charge of themselves, and the brands are currently too individualistic to organise something that may well benefit them all.

Surf: Non-Stop Wave?
The trend continues: more and more people are becoming aficionados. Some come from snowboarding - they want more boardsports in their lives and lure of surf is irresistible to them.

Pukas, as usual, is doing very well. It is one of these few brands that has chosen its own path and has consequently collected success in an apparently easy way. Check out this season’s clothing collection – and just take a look at the jumpers!But the world does not end with Pukas, there are some small local brands, which are provoking plenty of interest too; the Catalonian brand, Dharma and the Canary Isles-based, Malasangre are all shouting loud enough to show they understand surf culture. Pay attention to them both.

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Portugal
BY JOÃO REI

So, here we go straight to another summer... In fact I could say we are already a step into next season, as winter here in Portugal is nothing like the old days. There is a question in the air whether winter has actually lasted more than three months, or was it just a long autumn? Such are these mixed seasons and strange weather patterns that it’s starting to freak me out and I think I need to watch that Al Gore documentary again.

So, if we add the weather instability to the bad management of the current Portuguese economy, you can easily guess that the maths is not good for this closing winter season and the repercussions for the year ahead - especially in the previously buoyant softgoods sector. The boardsport ‘market stall’ is in a worse way than it has ever been over the past few seasons, with reduced consumer spending being blamed on lower incomes nationwide as a result of the declining economy.

Shop owners are freaking out. Their shops are still loaded with winter stockand are therefore becoming less than positive and much more conservative when it comes to choosing brands, items and colours for the summer.

The snowboard market here in Portugal is harder then ever for all technical material, so shops are focusing more on skateboard and even more so on surf goods. Looks like the sport of the ancient Hawaiian kings is more popular than ever, even out of season. For this season, trends will be delivered with some sparkle based on pattern prints, fashion cuts and trendy colours. Boardsports clothing and fashion is blending more than ever, with technical prints, applications and embroideries over asymmetric cuts. Sneakerwise there are a lot more glossy contrast colours and snakeskin effects walking our typically black-and-white Portuguese sidewalks.

So, there’s a need to focus on marketing strategies to paddle safely to stable grounds, as well as a need to consider some investments with realism, skill and common sense. But more then ever, let’s use the most important lesson we learned about life from surfing – balance!

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China
BY ROBBIE BURNS

China may be prepared for the Olympics but it isn’t prepared for the weather. Central and Eastern regions have experienced freak snowstorms. As the temperature hovers below zero here in Shanghai we are just thankful we have electricity, there are 40 major cities with power blackouts! All this amounts to transport chaos and some shipments abroad being delayed as a result. The timing was not too bad, however, so close to Chinese New Year most shipments were already packed for the February break, misery for the millions trying to get home! At the time of writing there were more than six hundred thousand people waiting at one station in Guangzhou alone.

As the transportation chaos clears, it will amount to a small blip on the fastest growing economy in the world, now racing at a Government stated 11% per annum. The real figure is likely to be higher. The Chinese are classic savers, with billions unaccounted for, stuffed in boxes and under bed mattresses. One poor bloke recently discovered his life savings (about $50,000 USD) had been aten by mice nesting in a box hidden under his house. Mice with money on their minds.

Beware The Street Competition
There’s an unfortunate consequence from producing your goods over here. It’s clear that manufacturer’s leak product into the market, and brands should take seriously the damage this does to authentic retailers. Profits and long-term retailer loyalty will go elsewhere. Some major brands are available cheaply and in easy to find locations, but are nowhere to seen in authentic outlets. Street competition from cheaper product eats away at market share as locals are tempted with factory leaked and copied product. I spoke with Ron Smith, an American factory production manager living in Shenzhen, and Xiao Feng (who goes by the nickname ‘Thrasher’) who runs a small authentic skate shop in downtown Shenzhen, near Hong Kong. “It’s hard for a skate brand to compete with an authentic $100 set up against a $10 copy available around the corner on Tao Bao road”, stated Ron. “The copies have quality issues, but it doesn’t stop people from buying them.” Other factors are squeezing Xiao’s shop too. The rent prices are rising as the economy grows, and his shop space has halved since opening two years ago but he is persevering.”

On a more positive note, China is developing into a serious market for streetwear and softgoods. Quiksilver has grown a staggering 200% in a year, with 28 retail shops now spread around China, of which half are franchised. Far from the beachside dude shops of Australia, Quiksilver retail stores are in flashy, high-rent shopping malls with Roxy taking two-thirds of the floor space, and profits. “We are happy with the growth in 2007”, said Brian Smith, marketing manager based in Shanghai. “2008 is a huge sporting year in China and we plan to leverage the best that we can. Compared to last season in Beijing our winter lines have tripled in sales and we have expanded the collection.”

Up-And-Coming Events – Slowly But Surely
Attending the smoothly run TTR Nanshan Open near Beijing recently, I saw that Quiksilver had made remarkable inroads into market share, with Nivit (once the dominating brand) seemingly nowhere to be seen. It is also a sign of weak brand loyalty in the emerging yuppie crowd.

Joe Eberling of Iconx (and Funboxx) goods are the largest distributor of authentic snowboards in China. “Board and set up sales this season are up by 50%, with Burton and Forum and Smith (Optics) being the most popular brands.” says Joe. “Interestingly we are seeing a change from last year, where it was mainly buyers who demanded the most expensive, we are now seeing customers researching and buying models and gear that suits them the best. This is a positive sign of the market beginning to mature.”

Another good event was the Jilin province half-pipe championships in December. Although only 12 riders and two spectators participated, in a tiny frozen resort a thousand miles from anywhere, it was still shown on CCTV news around the country - a positive sign of things to come.

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Russia
BY YURI KOLOBOV

I am writing this article two weeks prior to the Russian presidential elections. When you will read it the new guy will already be elected. You know what, I can look into the future and I know who will be elected! You want to challenge me? OK, It’s Medvedev. No surprise that my guess is correct. This is how democracy in Russia works and I love it. Because anyone can easily look into the future - no wild guesses, no wrong forecasts, no bad surprises... Next level democracy shit.

Unfortunately, unlike politics, business is much less predictable here. When everybody talks about recession in the US and possible crisis in Europe, here it feels like absolute quiet. Politicians say that Russia is an island of stability; I would say that it’s in the eye of a hurricane.

Now, lets talk about our things - snow and sales. Winter in Russia was decent, if not to say good! The one exception was St. Petersburg. Winter skipped the northern region of Russia completely. The first snow didn’t arrive until the end of February, sales were terrible, although a little better than last year. The reason for that were good snow conditions in the Alps, which still remains the most popular destination for Russians during the Christmas holidays. Moscow was OK - with temperatures hovering around zero since November, there were a few snowfalls colouring the city white and prompting the buying mood in specialty stores. All the Eastern part of Russia experienced a cold, consistent and snowy season. There were avalanches in the Urals in February, freezing temperatures in Krasoyarsk (Siberia) and snowfalls in Kamchatka.

The general mood in the market, however, is not that positive. Retailers (especially in Moscow and St. Pete.) are suffering from excess stock levels. The whole market is re-shuffling and many players are not likely to survive. Snow product sales are not growing as in the past, which has created a cautious mood between distributors and retailers. There is a very unpleasant trend going on - the core stores, previously the locomotive of snowboard sales, are losing their positions. Those who remain strong are selling mainly to older, middle-class customers, not 14-year-old kids like it used to be. Very soon we well be saying “Core is dead, god bless the... ” The what? Who knows? My guess is that Internet stores will represent the niche market in future. Internet boardsport shops are becoming more and more visible on the scene here.

Pondering their first estimations of the 08/09 forecasts, most of the distributors are saying that their orders are more likely to be flat than increasing. Chains and general sports stores are increasing their market share in overall volume. Softgoods sales are increasing compared to last year. Hardgoods in most cases are decreasing but not dramatically and all distributors are trying to secure their pre-season sales as much as possible to avoid cancellations, which hit them badly the last autumn.