Just read this on Transworld Surf site… How Will Imported Surfboards Change The Surf Market? Friday July 11, 2003 by Gary Taylor Aiming to be the “catalyst for positive change” within the surfboard manufacturing community, Global Surf Industries is the newest entry into the imported-surfboard sweepstakes taking place in the U.S. The company will offer three new surfboard lines marketed for entry-level to intermediate surfers and enters the market with a powerful ally in its corner: Thailand-based Cobra International Co. Ltd., the world’s largest manufacturer of windsurfing boards and an emerging player in surfboard production. Global Surf Industries was founded in July 2002 by Australians Mark Kelly and Lachlan Kekwick, both formerly of Surf Hardware – the parent company of FCS – where Kekwick served as CEO and Kelly was global marketing and sales manager. Cobra got wind of GSI and became a shareholder by the end of August 2002. GSI agreed to work exclusively on the marketing, sales, and distribution of standard polyester and thermoformed surfboards manufactured at Cobra’s Thailand facility, which is equipped to produce up to 300 surfboards per day. GSI’s current catalog includes the “Seven” line, eight predetermined shortboard shapes ranging from 5’8" to 6’8"; the “Blue” line, eleven mini-longboard, egg, and hybrid shapes from 6’6" to 8’6"; and four longboard shapes under the Modern Longboards label. GSI also markets and distributes the New Surf Project (NSP) and South Point Longboards, which are thermoformed boards similar to Bic windsurfers and a technical cousin to Surftech surfboards. Each line offers retailers a profit margin of up to 40 percent – significantly higher than margins of U.S.-built surfboards – along with other incentives such as stock service, free or subsidized shipping, and 30-day terms. “Our goal is to support retailers and help make the hardgoods section of their store profitable and easy to manage,” says Kelly, whose marketing résumé also includes Bausch & Lomb and adidas. "These boards are priced at the lower end of the market to allow the stores to profitably compete with the backyarder and to sit under well-known brands that people are already willing to pay more for. “No one who walks into a store intending to buy a top-name brand of surfboard is even going to look at one of our brands, as their mind is already made up,” continues Kelly, “but the person who’s just getting into surfing or doesn’t care about the brand of board they ride is potentially a consumer of our products.” Kelly added that GSI will deal exclusively with ‘core surf shops, rather than big-box warehouse outlets like Costco and Wal-Mart, which began selling Chinese-made surfboards last year. Despite Kelly’s reassurances, the emergence of low-cost surfboards imported from the Far East is a hot-button topic for domestic surfboard builders – many of whom declined to go on the record with their opinions about this topic. Other industries have already moved much of their production to the Far East, including the electronics and apparel industry. Now the snowboard and skateboard industry are under similar pressures to move production to countries like China, where labor costs are a fraction of those in the U.S. Many in the surf industry remain skeptical that mass-produced boards will ever replace the custom boards created by the close surfer/shaper relationship. “Try to name a sport with anything similar to the custom surfboard and the very personal relationship between the surfer and his board,” says Gordon Clark, owner of Clark Foam, in a company newsletter. Clark Foam supplies the vast majority of foam blanks to domestic shapers. “There are really none! This is something special.” But since many smaller shapers are already finding it hard to squeak out a living making surfboards, it’s likely that imported boards will nevertheless have a big impact on the market. Bill Bahne, a respected shaper and industry statesman who sits on SIMA’s board of directors, conceded that the emergence of low-cost surfboards built overseas is an inevitable consequence of today’s global economics. Bahne says domestic manufacturers must answer the challenge by maintaining their high-quality production standards and improving their marketing strategies or fall by the wayside. “We can’t just put up a gate and say, ‘You can’t come in with your product,’” says Bahne. “That isn’t for the betterment of surfing as a whole. But there’s an evolutionary thing happening, and we’ll see a certain amount of manufacturers going out of business because it’s not profitable – especially with the new competition.” Here or there? In a 2002 company newsletter, Clark says the construction of foam-fiberglass boards in countries with very low labor and other costs is nothing new. “The first big market was Japan’s department stores,” he writes, "followed by a few surf shops on our East Coast. Conventional sporting-goods stores worldwide were the next customers. The boards keep getting better and cheaper. Several times the very efficient large discount chain stores have tried to market these boards. This is interesting, for they retail them at a price that would make any retail surf-shop owner shudder with fear! When Costco first tried to market these boards, they were horrible. Costco is marketing them again, and they’re a lot better. “We can debate the effects of these boards on the American surfboard manufacturing industry forever,” Clark continues, “but anyone who thinks retail surf shops will sell many of these boards if they’re offered at the local Costco or Wal-Mart is nuts.” Lost Co-Owner Matt Biolos is passionate about the topic of overseas production. “When you take surfboard manufacturing out of the true surfboard factory, you’re taking work out of the hands of surfers – skilled craftsmen who were born and raised surfing,” he says. “For every surfboard {made overseas}, you’re taking well over a 100 dollars in labor out of the hands of those people. So if they’re {overseas companies} bragging about doing 50,000 boards a year, just multiply that by 100 dollars and that will be the money taken out of American hands.” In addition to this monetary loss, Biolos says overseas production saps the lifeblood from the surf industry: “If it all plays out, and surfboards become like any other sporting-goods product made in China, you’ll be depleting the talent pool of the {surf} clothing industry. There will be no more Bob Hurleys or Shawn Stüssys. There will be no more Rustys, Gordon Merchants, lesser-known designers like Jim Zapala, retailers like Dave Hollander, or even assholes like me. All of us got our start as shapers.” It’s clear surf retailers are walking the tightrope between improving profit margins while not putting their longtime custom-surfboard vendors out of business. “Our goal isn’t to replace our upper market, it’s to gain that next level of youth between eight and fifteen years old and also the female market,” says Roy Turner of Surf City in North Carolina, who received his first shipment of boards from GSI in February. “I’d much rather see it be us than a Target or Costco or Wal-Mart – and that’s where the concern has been. Global coming to me has not affected my relationships with U.S. manufacturers. They’re bringing us another pricepoint, which brings us a new customer.” Ventura Surf Shop Managing Partner William “Blinky” Hubina says his allegiance to longtime board-building friends and associates didn’t prevent him from carrying GSI’s thermoformed NSP line. In fact, during a two-week span in February, one-third of all boards sold out of his shop were NSPs. “We’re an old-time surf shop,” he says, “and we try to promote Ventura surfers and shapers. We probably have ten or twelve shapers here, and we really want them to make a living at it. I shape, too, but as a retailer I have to make a living, and you can’t pass up something with a better markup. I think people will always buy custom-shaped boards – thank god – but the more durable boards have their place.” The potential threat of imported boards is a long overdue wake-up call for manufacturers mired in old technology and marketing techniques, says Mark Tolan, whose AST company focuses on improved surfboard resins. “While it may be impossible for domestic board builders to lower their prices, they can compete on the levels of value, innovation, and marketing,” he says. “Shapers, glassers, and retailers need to get on the same page and focus on building and selling the best product possible. The public will notice this change and embrace it, which will regain any lost market share, if not increase it. Even though the industry is on the run, it can still catch up and win this thing. The last thing anyone wants is for the local surf shop to be replaced by Target or Costco.” What do you think? E-mail and let your thoughts be heard.
here is the real twist- i could move my ass to bumf!#k idaho, purchase land there, build a surfboard factory, hire people who dont surf to make the boards, and in the end, that would still keep the ‘jobs’ and money here in amerika. cost o livin is CHEEEP there…
Sounds like to me that your dollar is too strong which lends a competitive edge to imports, eg Fat Penguin hand built 40hrs AU$1460 converted US$650. You guys starting to get it?
Sounds to me like maybe the small underground garage type guys will be in a pretty good position just like the late sixties.The soul element is (hopefully) still a big factor.Just an old farts opinion.To me these big corporations are “The Man” as we used to say. R.B.
Wow! Huzza whew!I gotta ask. Maybe someone knows. Who supplies the blanks to “those guys” making the import models from those other countries like China and Thailand ya’ll are talking about that sell to them big chain guys. Whoa!
Australian blanks.
maybe they are making their own blanks
My biggest fear is that someone (big surfboard company thay mkes popouts) bribes and lobbies legislators to enact strict laws and codes that disallow small time shapers by limiting or taking away access to resin, fiberglass and more importantly, polyurethane blanks. So, eventually you will have to buy a Merrick or Rusty at 500 bucks, sanded finish, or buy some plastic piece of crap by Surftech. The small time shaper (who is usually the best anyway, regardless of what Rusty thinks) will have to pay high prices or will be legislated right out of business. It isn’t just the overseas stuff you have to worry about. It’s these big time guys like Merrick and Rusty who would love to squeeze out the little guys. They could lobby so that all shapers and glassers have to use state of the art safety and environmental equipment (expensive). Then, only they would afford the equipment and only they would make boards. So everyone would buy a Rusty (that is in no way made by Rusty) or a Merrick (which is probably made by some guy named Lou from Cleveland). People need to stop complaining about the current board. Mark Tolan is full of crap. His resin requires expensive equipment for curing, and if it becomes standard, then small guys get squeezed out. And you watch. Some lawyer, hired by Tolan, will probably get a congressman or the EPA to mandate his product for environmental reasons, and then every shaper will have to buy into the bigger deal, which he won’t be able to do because someone else will already have more money. That’s just around the corner. My suggestion? If you are a surfer, start stocking up. Get your favorite boards duplicated three or four times, whatever it takes to keep you going for several decades. Because it’s just a matter of time before the guy down the street with the little blue shaping room and the little white glassing room is declared an environmental hazzard and shut down.
Furthermore, if you read that article in Surfer a few issues ago with all the industry big wigs (Rusty, French, other dudes, etc.) they are actually whining about their small percentage of market share. One guys says that the big names (Merrick, Rusty, etc.) are only getting about 20% of the market. Then Rusty and others whine “less than that.” Too bad. I know those guys worked hard, but others get to come in too and start out small. Eventually, though, mark my words: There won’t be any way to start out small. Just look at the auto industry. What chance do you think you could get your own design manufactured? If you want to build cars, you would never be able to break into the market. Surfboards will get that way soon. You’ll see. I, on the other hand, am stocking up. I have enough boards to last me well into retirement. If I were a shaper, I would rent a warehouse and stuff it with blanks, glass, and resin. If someone cuts off Clark then all hell will break loose. Which brings me to another point: Why does he have such a corner on the blank industry and what kind of profit margins does he realize?
Paranoid? Been reading too many conspiracy novels? Don’t fall off the cliff!
if they shut down clark, get a hotwire and make your own blanks. use epoxy resin. yes, resin will still be available. look at the boat manufacturing business, you think they’re going away? nope, and they use LOTS of resin and fiberglass. supplies will remain plentiful, just may have to change how we go about getting them.
good point allen- the surfboard industry is but a TINY fraction of the ‘resin utilizers’- now, lets think about something here- if the us gv’t is going to tighten emissions concerning certain chemicals and those chemicals are made herein the country(us), and the us is known to ‘dump’ chemicals in order to sell off excess material, and that same material gets exported to china to produce surfbaords. now, if the resin is being produced here with the ‘new’ emissions, or in this case, less emissions, and china is buying that very same resin to make shitty procuct with, how would that improve the life span and durability of the product? ZERO IMPROVEMENT. these global ‘entrepenuers’ are a faction of the cancer in our lives known as corporate america. they want a piece of the action. and also- those particular products made in china, ARE MADE IN A COMMUNIST country- i do not want to support communism with MY hard earned dollar. why would anyone else?
The cows are already out of the barn. Checkout just about anything we buy in the US today and its made in China. Trade with the communist was started right under our noses and nobody cared. We now are dependent on them because we do not manufacture anything ourselves. Who runs the Panama Canal? Yet we can not trade with Cuba. The Chinese make the Cubans look like choir boys.
Hey guys hes right…but the waves will still turn up…and the chineese will learn to surf and the whole thing will go round again, but hopefully they will not be as tight ass conservative as you yanks and my fellow Ausis when it comes to surfing and surf design. YOu guys dont own surfing. Imagine surf parks the size of shopping complexes with various wave type and sizes for all levels of surfers. This is the next generation guys, not pristine coastline but complexes (which by the way keep the masses from the beach), as soon as the USSF get the ok to take surfing to the Olympics theyre away. And tell me what happens to equipment that is used in such high level events such as this? Here comes the Penguin!
Becoming bitter? Visions of Grand Illusions! Relax, your thinking too hard.
Surfer Mag. Dec. '02 Pg. 81 Rusty talking about board buyers and technology: " … And finally you have the edge guy, who more often than not chooses to work with a smaller label, with a relatively low-skilled craftsman, using the same materials that we’re talking about, the ones that have been around for 35 years. I think one of the main things that’s going to help the market shift the overall technology is when the cutting-edge material is NOT available to the generic customer who goes down the street, buys the materials and says, “Oh, I want to be a surfboard builder.” I may be wrong, but that reeks of greed to me. How did he get his start in the business?
I MIGHT BE RATTLIN A CAGE HERE, BUT R. BOUGHT MATERIALS FROM MITCH’S IN LAJOLLA!!!BACK IN THE DAY.
Mr. penguin, Imagine a coastline from north of the San Francisco Bay all the way down to the Santa Barbara county line (thats in California) called the Monterey Bay National Marine Sanctuary, for you Aussies thats 275 miles of our California Coast that can’t be touched (anymore). Thats alot of high priced realestate every one with a garage (some with people shaping and inventing nice surfboards ,wait, better than nice, some outstanding rides) . anyway the undergound is alive and well, no thanks to the global economy. Stay Solid brother.
See, that quote by Rusty says it all. To me it screams, “I don’t want to compete with the small time shaper.” By the way, the “edge surfers” he is talking about are us, the surfers who stopped buying boards out of shops and use shapers we know and trust (small time guys). Of course, most of you ARE shapers, and most of you are small time compared to Rusty. The point is, he thinks that most small time guys are relatively low skilled craftsman, which is complete bullshlitz as far as reality is concerned. What really ticks off a guy like Rusty is the fact that he really can’t sell direct anymore, so he has to sell through surfshops and, therefore, must mark up. So the kids pay 450 bucks for a shortboard that is not made very well (I mean, a sanded four ounce glass job is not a high quality board). Or they pay 550 for a rubbed gloss coat, but they could (if they knew) go buy a blank for fifty bucks (Clark makes a decent profit), get it shaped for a hundred bucks in two hours (good money for the shaper), and then get it glassed for 160 with a sanded gloss or 180 for a rubbed gloss coat. So, what’s the grand total? 310-320. And it’s totally realistic. I do it all the time. And the shapers who will do it are top notch. Eberly, Linden, Aipa (unless, of course, you consider those guys "relatively low skilled). All of them are happy to have you drop off the blank, pick it up a few days later and lug it over to the glass shop. They make a hundred bucks for two hours of work (under the radar, of course–even better), and everyone is happy----EXCEPT RUSTY. THAT’S what he and the other shapers in that Surfer article were really complaining about, because the surfers are happy. I NEVER hear, while out in the lineup, “I sure like this new board of mine. I hope it lasts a long time.” I never hear that. They just want them light and cheap and fast. Nothing is more important than fast. If a shaper can turn it around in a week, that’s magic. If someone could get to all the kids and tell them to ask mommy to drive them to Mitch’s to buy a blank, drop it off at the shaper, pick it up in three days and drive it to the glass shop, guys like Rusty and Al Merrick would be out of business. But that would be bad to put them out of business. They are great shapers. I hope they continue to do well. I just want them to shut up about the small time shapers who have most of the market share, thank God. Long live the underground shaper. Amen.
SCREW THE BIG WIGS. POWER TO THE PEOPLE.