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The Honolulu Advertiser
Posted on: Monday, July 20, 2009

Surf shops down, not out


BY Greg Wiles
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Sera's Surf 'N Shore shop in Ala Moana Center shows a variety of decorated skate boards, with prices up to $135. Reid Inouye, publisher of Heavywater magazine, says Hawai'i's surf shops are faring better than those on the Mainland.

HONOLULU ADVERTISER LIBRARY PHOTO | 2009

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A new study shows that Hawai'i surf and skate shops, along with similar stores in other states, are experiencing a dip in sales but perhaps not as bad as other retailers.

The study released by the Surf Industry Manufacturers Association shows there was a 3.4 percent decline in retail receipts nationwide between 2006 and 2008, when sales shrank from an estimated $7.48 billion to $7.22 billion.

"The surf industry is very resilient thanks to it having a core base," said Sean Smith, executive director of the group based in Southern California. Smith said surfers and skaters generally adopt the lifestyle and don't drop the activity because the economy has soured.

"They don't go away just because times are tough. They just spend a little less."

The study, conducted by research firm Leisure Trends Group, looked at a number of different market segments but did not break out specific states.

It found, however, the sales were strongest in what it called the West Coast region, a grouping that includes Hawai'i and other states with shores along the Pacific Ocean.

Reid Inouye, publisher of Heavywater magazine, a Hawai'i-based publication focusing on surfing, said there has been some softness for retailers because of the economy and because of a downturn in tourism.

With fewer tourists coming to the state, the sales for Hawai'i surf shops have dropped a little, Inouye said.

"Definitely sales are down from two years ago," Inouye said. But "I don't think we got hit as hard as on the Mainland."

The study found that sales at U.S. surf and skate shops — a subset of the total sales that also included those from department stores, military exchanges and mall specialty retailers such as PacSun — totaled $5.32 billion, also down 3.4 percent from 2006.

It also found the number of surf shops declined by 7.6 percent during the period. Inouye said he didn't believe the numbers were off that much in Hawai'i.

"Everybody is still around," he said, explaining surf retailers here have contended with tough times before and know how to adjust to setbacks, just like a surfer who gets back on a board after falling off.

"The surf industry in Hawai'i has been through ups and downs before."

The study did find some bright spots for the business, calling attention to an almost 16 percent rise in shoe and sandal sales to $1.5 billion and a 13 percent rise in accessory sales to $561 billion as shoppers snapped up sunglasses, hats and duffel bags.

Apparel sales totaled $1.7 billion, down 0.8 percent from 2006. Annual sales per square foot at surf shops averaged $508.

Sales of hard goods, a category that includes surfboards, shrank by 3.7 percent to $1.1 billion. Inouye said Hawai'i could be running counter to that national trend because sales of stand-up paddle surfboards, or SUPs, have exploded and helped some manufacturers and retailers.

"There's a backlog of orders for stand-up boards in certain parts of the U.S. and Hawai'i," said Inouye, who said his newest magazine, "StandUp Paddle," began publishing nationally this year and is enjoying a surge in advertising sales.

Smith said he has begun to detect some optimism from retailers after a horrendous fourth quarter and tough first quarter.

He said Mainland retailers are reliant on good weather to drive sales and that this summer has been a good one in California.

"There's a lot of optimism out there that the end of this year there should be a pretty good turnaround."