A look into Airwalk’s growing operations.

Several years ago, Airwalk was considered a top snowboard-boot manufacturerthat drew heavily from its skateboard heritage to make great strides in the snowbusiness. Today, it has evolved into a full-equipment supplier looking to expandon the idea that it’s a snowboard company, not just a boot or youth-orientedfootwear brand.

That’s a major departure from the company that once supplied almost everypro snowboarder with boots and skate shoes. But in the end, with a growing andmainstreaming snowboard market, Airwalk sees the entire business as vital to itsimage. And with the resources that its successful footwear business offers toits snowboard program, the management believes it has plenty of room to continuegrowing and improving in the snowsports market.

With cutting-edge snowboard constructions, TV advertising, and one of thelargest pro teams in the business, Airwalk has resources most snowboard brandsonly dream about. With all this going for it, SNOWboarding Business decided itwas time to head out to Boalsburg, Pennsylvania and see just what Airwalk hasbeen up to.

Resources

Centrally located in the Quaker State, Airwalk’s offices house 80 employees,including designers, product managers, sales, marketing, and customer servicedepartments. The company also has another office in Altoona, but is slowlymoving the people there to the main office.

From the back of the building, one gets a view of Tussey Mountain, a small,East Coast ski resort employees can drive to in a matter of minutes during thesnow season to test out product or just ride. In the summer, the surroundinggreen, wooded hills provide outstanding singletrack mountain biking foremployees.

The brick, multi-story office sits just outside of the small town, and ashort ride from State College where Penn State University is located.

On the top floor, product category managers sit at one end of the buildingacross from an area where the eight designers are located. The groups cometogether in a central meeting room to discuss product in a series of three orfour roundtables throughout the year. Design director Todd Miller oversees bothsnowboard boot and footwear lines.

In the design area, there are storage closets and file cabinets withhundreds of samples of shoe and boot soles, fabrics, and snowboard boot outermaterials used or developed for the designers to reference at any time.

Marketing, customer service, sales, operations, and other support staff arelocated on the bottom floor of the building. Six people work in marketingservices alone, with another room filled with customer service. Granted, not allthese people are working directly on snowboarding, but the company has ampleresources to devote to the snow business during the season, without having tohire new people.

The international sales department is in another part of the floor, and isseen as an important growth area, with the company recently hiring all newdistributors in Europe. Airwalk is distributed by the athletic footwear-giantAsics in Japan, giving it strength, stability, and strong market penetration inthat rocky market.

Airwalk is broken into two divisions: active casual and action sports, withsnowboarding falling under the action-sports umbrella. That category does inexcess of twenty-million dollars worldwide, and is profitable. However, it’sstill just a small part of the estimated 200-million dollars in sales thecompany does each year, but it’s viewed as a vital part of the whole.

The two divisions draw from each other in an amiable give-and-take. With thelarger active-casual unit as the bread-winner, snowboarding firmly establishesAirwalk’s presence in the youth and alternative-sports markets and as alifestyle brand. Snowboard Category Manager Paul Alden points out that thesnowboarding program benefits by utilizing the larger marketing budget to dosuch things as be the presenting sponsor of Board Aid for the last five years.

Company For Sale

To help manage the growth the compy experienced on the heels of itsbooming mainstream popularity, Airwalk started looking for a potential buyer.After almost a year of talking to many different companies, Airwalk is no longerpursuing that route, says Boot and Apparel Product Manager Cec Annett. With newbanking in place, along with new management, the current owner feels confidentthe management can run the company by themselves.

The new officers include CEO Peter Goehrie and CFO Bob Fischer. LongtimeAirwalk manager Lee Smith remains the president.

“Airwalk grew so quickly in the last three years, that things were just outof hand,” says Alden. “Now the company has reorganized, and the bottom line isbusiness. We’re now focusing on sales and service of sales.”

The snowboarding division has also gone through some changes. VeteranAirwalk rep Dan Van Duzor has taken over as the national sales manager forsnowboarding. The company has hired a new snowboard team manager, Renee Hansen,to set up photo shoots, team travel, and pros’ salaries. To assist withmarketing, the company has also hired outside agencies Fuse, to handle thevertical promotions, and Sancor, to do more general-market work.

Team

To get product feedback and design directions, the staff relies heavily onits cadre of pros. “The team is pivotal,” says Alden. “Airwalk has the second-largest team budget in the industry.”

In addition to the full sponsorships that most of its pros have, Airwalkstill has contracts with high-profile riders such as Tina Basich and ToddRichards to ride just its boots. Richards was re-signed this summer to a two-year deal.

The company expects these pros to do more than just endorse its products.”It’s not like three or four years ago when team riders felt like they justdeserved a check,” says Alden. “They have a job to do now. We shipped two boardsto Noah Brandon and I got back the most intelligently written evaluation aboutthe boards I’ve ever seen.”

With more than fifteen global A-team, more than 30 B-team, and 100 regionalriders, the company relies heavily on team feedback to assist with designs,graphics, and overall performance of its products.

According to Alden, he’s seeing more initiative from the riders as well. Ata recent meeting, a team member asked for a rep list so the rider could set uphis own shop demos as he travels around the country.On-snow Commitment

Having the pro input is great, but Airwalk has taken things one stepfurther. Its R&D Manager Joe Babcock is now based at Mt. Hood, Oregon to testand evaluate new product designs and in-production models year-round to makesure they meet specifications during the manufacturing process.

This summer the company hosted a major get-together of its designers andteam riders to work on products. By doing this, the company helped giveownership of these products to the different people involved with developing thelines. While retailers won’t be able to preview these new products for severalmonths, the Airwalk staff believes it will be offering the most complete andbest-ever line of snowboards, boots, bindings, and apparel.

Product Development

It’s a long process to finally get those products on-snow just for testinglet alone for delivery. The equipment tested on the slopes during the summer wasactually imagined the previous winter.

The product managers like Alden and Annett first write up briefs describingthe different products, prices, materials, and target audiences the designersshould build for. These briefs are produced through a combination of reps’,retailers’, and team feedback the product managers get throughout the season.The briefs are presented to designers in January, and are turned into advancedconcepts (product drawings and designs) in the next month or two.

Often, the product managers will start with as many as 40 different designs,which will be cut down to twenty to 25. Most of these will make it through thefirst construction phase, but then will be cut out after a round of fit and on-snow testing. By March, the designers and product managers will ask for feedbackfrom retailers.

After several more rounds of testing, retailer feedback, and companyroundtables, the product is ready for the sales cycle, then production. Often,designers spend several weeks in China at the company’s factories to ensure thesample process is followed and everything is built to specification. The companyhas substantial pull at these factories because of the volumes its doing now,and even has full-time support staff based there.

The development processes are followed for all of Airwalk’s snowboardproducts, now that the company has become a full-line supplier. And things looklike they will continue to expand. Annett says that board models will go from 26SKUs for the 1998/99 season to 37 or 38 for ’99/00. The company’s clothing linewill also expand by 30 percent.

Servicing Everyone

Airwalk sees itself as a supplier of snowboard products to riders of allages, not just the same market segment it goes after in footwearà‚•the eight to 22year old.

“For the long-term position of the brand, being simply a component supplierwas not a good idea,” says Annett, of the company’s desire to expand into boardsand other hardgoods. But he also recognizes Airwalk could have done a better.

“We failed to convey the message of who we were and what our products werewhen we first came out with boards and apparel,” he says. “We’ve also felt theresistance from the industry. Maybe we set our sights a little too high.”

With a multi-tier product separation, the company is ready to service anyretailer in the marketplace. Its reps are employees of the company and arededicated to selling only Airwalk products, so it expects better customerservice and retailer attention from them.

Snowboard boots are the strongest winter category the company has right now,but other areas are growing. Worldwide, board sales doubled this year and thecompany has exclusive multi-year deals with board factories to continueinnovating products like the super-light, freeriding A-1 board, which utilizes aKevlar reinforced advanced composite material core instead of wood.

According to Annett, the main philosophy of the company is to market onelogo and one brand for whatever product it sells. With strengths like extensiveproduct development, strong marketing, new management, and years of snowboardingexperience, the company is poised to grow even bigger in the snowboarding world.

“We developed an excellent brand,” says Annett of the company’s mainstreammarketing, such as its TV ads on MTV, FOX, and the Comedy Network. “Now we haveto build an excellent company to support the brand.”round of fit and on-snow testing. By March, the designers and product managers will ask for feedbackfrom retailers.

After several more rounds of testing, retailer feedback, and companyroundtables, the product is ready for the sales cycle, then production. Often,designers spend several weeks in China at the company’s factories to ensure thesample process is followed and everything is built to specification. The companyhas substantial pull at these factories because of the volumes its doing now,and even has full-time support staff based there.

The development processes are followed for all of Airwalk’s snowboardproducts, now that the company has become a full-line supplier. And things looklike they will continue to expand. Annett says that board models will go from 26SKUs for the 1998/99 season to 37 or 38 for ’99/00. The company’s clothing linewill also expand by 30 percent.

Servicing Everyone

Airwalk sees itself as a supplier of snowboard products to riders of allages, not just the same market segment it goes after in footwearà‚•the eight to 22year old.

“For the long-term position of the brand, being simply a component supplierwas not a good idea,” says Annett, of the company’s desire to expand into boardsand other hardgoods. But he also recognizes Airwalk could have done a better.

“We failed to convey the message of who we were and what our products werewhen we first came out with boards and apparel,” he says. “We’ve also felt theresistance from the industry. Maybe we set our sights a little too high.”

With a multi-tier product separation, the company is ready to service anyretailer in the marketplace. Its reps are employees of the company and arededicated to selling only Airwalk products, so it expects better customerservice and retailer attention from them.

Snowboard boots are the strongest winter category the company has right now,but other areas are growing. Worldwide, board sales doubled this year and thecompany has exclusive multi-year deals with board factories to continueinnovating products like the super-light, freeriding A-1 board, which utilizes aKevlar reinforced advanced composite material core instead of wood.

According to Annett, the main philosophy of the company is to market onelogo and one brand for whatever product it sells. With strengths like extensiveproduct development, strong marketing, new management, and years of snowboardingexperience, the company is poised to grow even bigger in the snowboarding world.

“We developed an excellent brand,” says Annett of the company’s mainstreammarketing, such as its TV ads on MTV, FOX, and the Comedy Network. “Now we haveto build an excellent company to support the brand.”