Some manufacturers gain retail real estate by opening up their distribution. Some use new display items or expand their merchandise offering to build their business. Action Sports Ltd., the parent company for the Expire, C4, and Daisy snowboard brands, opted to go another route-it bought its own retail chain.
Action Sports, Ltd., headquartered in Irvine, California, has purchased Surf, Skate & Snow, a chain of six retail stores located in factory outlet centers throughout California. “In the snowboard wars, it has been hard to get product placed in a lot of stores that only want to carry the top-five companies,” says Kevin Grace, president of Action Sports, Ltd. “We saw the purchase of Surf, Skate & Snow as a way of growing our business in a tough market.”
Surf, Skate & Snow carries brands like Billabong, Gotcha, Mossimo, Rip Curl, Kemper, K2, and Vision along with Expired, C4, and Daisy. Grace says the retail stores did about three-million dollars in sales in 1997 and expects four-million dollars out of the same stores in 1998.
Selling its own product through the stores won’t dilute the image of the product for Action Sports’ other retail customers, Grace says. “It will be a private-label brand in our own stores, but we’ll still sell it at full retail price, so the other retailers and distributors will not feel cheated out of anything.” Currently, Action Sports snowboards range from 179 to 199 dollars for a board/binding set.
Brian Dyches, principal for Retail Resource Group, a retail consulting firm, sees a great research opportunity: “If it’s handled correctly, what they’re doing will not compete with their existing retail base, and they can use the stores as a learning tool that can be turned into ideas to help their other retailers increase their business.”
Action Sports, Ltd. started in 1993, manufacturing Expired and C4. The company acquired Daisy next, and went public in 1998. The three brands are sold through snowboard shops and sporting-good dealers, both nationally and internationally. “As a publically held company we are in a unique position. We have the money to expand, and we saw the opportunity to increase our revenues through the purchase of the retail chain,” adds Grace.
Surf, Skate & Snow was started in 1997 by Raece Richardson, formerly with Rip Curl Mountainwear. Richardson is now president of Action Sports’ retail division. Grace said the company expects to open at least another four retail stores within the next year.
Grace added that within the same time frame, the company also plans to acquire and merge with a skateboard business and launch a men’s high-end fashion footwear division.