BURLINGTON, VT — With 25 years of exceptional growth and the launch of successful new brands, Burton Corp. is restructuring. The changes are being made in order for the company to continue to invest heavily in R&D, and preserve its leadership position in the industry. The combined effects of a slow global economy and 9/11, a poor snow year, and the company’s evolving business model have prompted Burton’s move to gain new operating efficiencies. During the past month, Burton implemented its first company-wide ‘Shared Services’ structure, which will oversee operational, financial, and sales management functions for the entire family of Burton brands (Burton Snowboards, R.E.D. impact protection, Anon. Optics, Gravis Footwear, and a soon-to-be announced apparel company launching this summer). The new structure will eliminate some duplications of effort and efficiently integrate support functions. Product development, marketing, and brand management will remain brand-specific and will be managed separately, as they have in the past.
Burton’s restructuring is also a move to reduce costs. The toughest component of this move is a reduction in the company’s worldwide workforce of 10 percent. This figure includes seasonal layoffs that traditionally occur every year. “The people side of these moves sucks, but if the market is telling us this is what it takes to continue to develop the best and most innovative product out there, we have to sacrifice and streamline so we don’t compromise those objectives,” explains Jake Burton, Founder and Owner of Burton.
Although statistically this season was very good, retailers globally are in a very cautious mood in their pre-booking of merchandise for fall deliveries. Since Burton’s annual production order is based on their pre-bookings, the company has had to scale back expectations for the year–and will not be building as much inventory for speculative reorders. “We have invested heavily and built infrastructure to support multi channel distribution, globally. The shared service structure will enable the organization to rationalize the investment to current business conditions. These moves are geared toward maintaining our market position by helping us become more efficient, and poised for continued growth,” explains Tom McGann, President of Burton Snowboards. “They will also allow us to maintain the high level of dealer service our retailers have come to expect. Change will help us become a stronger company and ultimately a stronger industry.”
Despite a ridiculously poor global snow year, the sport of snowboarding continues to grow, and Burton Snowboards’ North American pre-season business is tracking with last year’s. Consumer interest and participation are at their highest levels ever, and the sport has a tremendous amount of energy coming off the Olympics, gaining vast mainstream attention, and establishing new role models in sport.
Burton is looking ahead to another profitable season this year; the company’s commitment to growing the sport and developing the best damn snowboarding equipment in the world has never been stronger.