Crisis In The Water: SIMA Surf Summit 4 Tackles Environmental Issues

More than 150 surf-industry executives came together at the fourth-annual Surf Industry Manufacturers Association Surf Summit to discuss the pressing issues facing the industry. The event, held May 17¿20 at the Westin Regina Resort in Cabo San Lucas, Baja California, was also blessed with consistent head-high-plus surf that kept the long, dusty road out to the East Cape busy from predawn to well after dark.

**** Will The Industry Heed Surf Summit’s Environmental Message? ****

The primary goal of the Surf Summit is to foster a common perspective on the evolution of the industry. Last year’s hot-button topic was the Internet, and the surf-industry’s e-tailing course was drastically influenced by what it heard at the last Surf Summit.

Let’s hope this year’s event has a similar impact, because as keynote speaker Adam Werbach and Surfrider Executive Director Chris Evans both pointed out, the surf industry is facing an environmental crisis that could fundamentally change the way we do business.

Within the next 50 to 100 years, Pipeline, Kirra, J-Bay, and literally thousands of other surf spots might disappear due to rising sea levels associated with global warming. However, Werbach — who Rolling Stone described as “a fixture on the lists of the most influential Americans under 30,” and who was also elected president of the Sierra Club at age 23 — says we’re already being hurt by this troubling phenomenon.

“Global warming is affecting everyone in this room, but we’re not fully aware of it,” he said to Surf Summit attendees in a beachside address. “It will affect every person’s business soon — if it’s not already. Warmer seas and a saturation of CO2 in the water have led to a bleaching of coral reefs. We’ve lost a quarter of the coral reefs on this planet in the last 50 years — a third more are very threatened.

“For some people this is an emotional or moral issue, but it’s also a business issue,” Werbach continued. “Right now you can look at maps — which are available from the Intergovernmental Panel On Climate Change — and see where the shorelines are going to be gone. There’s a question about whether we’ll be able to sit right here in 50 or 100 years or whether we’ll be underwater. We’re talking about things that we’re going to see in our lifetimes.”

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But Werbach’s message wasn’t all gloom: “You hear a lot of environmentalists talking about the things that are going wrong. People need to pause every once in a while and realize that in our lifetime the people around these tables have seen things get better. We need to tell those stories, because if we don’t tell them, no one will ever believe we have a chance to make things better again.”

Ultimately Werbach says our mission is simple. In the great Quaker tradition, the surf industry needs to bear witness to what’s happening to the environment and continually convey the amazing beauty and power of the ocean to consumers. “Go out, see amazing places, and then come back and tell people about them,” he said. “Say something. The whisper campaigns are the most powerful ones I’ve ever seen.”

**** Are Fewer People Hitting The Beaches? ****

But the surf industry doesn’t have to wait 50 years or even a single month to see the adverse impact of pollution on business. According USC Professor Lindwood Pendleton, who spoke on an environmental panel discussion on the third day of Surf Summit, nearly 200,000 fewer people visited Huntington City Beach in 1999 than in 1998. The reason: “People’s perceptions of water quality are very negative,” Pendleton said.

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Pendleton found a similar trend in Los Angeles. Fifty percent of Angelenos say they go to the beaches. Of that group, only 38 percent go in the water. Forty-five percent of those people say they stay out of the water because of pollution.

The bottom line is that many people in Southern California have begun to view the beach as an unhealthy place. “Who ccan blame them?” asked Evans. “Every beach sign, every closure sign, every advisory sign, every rain advisory, every story in the news media — whatever form that is — every word-of-mouth story about a surfer or ocean-user getting sick, works to teach the masses that the ocean is an unwholesome place.

“The scope of this problem is immense,” he continued. “And that’s something we have to think about without being cynical or discouraged. More than 7,000 beaches closed last year; more than half of them were in California.”

The discussion made an impact on more than one executive: “We have a complete responsibility to keep the oceans clean,” said SIMA and Op President Dick Baker after the presentation. “We play in it, it’s our business, and if you sat through that meeting and didn’t get a chill down your spine about the type of problem we have, then you have a serious hangover.”

**** Pacific Sunwear CEO Addresses Skateboarding’s Increasing Influence ****

Pacific Sunwear CEO Greg Weaver discussed the future of the retail chain and how it was going to fit in with the ‘core market during a lunchtime address.

“As recently as six years ago we were a guys-only store,” Weaver said. “Today, we have a girls’ business that does about 30 percent of sales, an accessories business that runs in the mid teens, and we have a shoe business that’s about nine percent of sales.”

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While a few manufacturers continue to quietly gripe about PacSun’s private-label program, Weaver asserted that branded sales make up 62 percent of PacSun’s business, while 38 percent is private label. “This percentage has been the same for about seven years,” he said.

Skateboarding’s influence continues to expand at PacSun. As recently as last year, 30 percent of sales were from skate-related brands. That number now stands at nearly 50 percent.

For part of the discussion, Weaver shifted his focus onto other mall-based chains like Old Navy and Abercrombie & Fitch, which, he says, have had a lasting effect on the teen market.

Old Navy, which has been around for seven years, has ballooned into a seven-billion-dollar company. “Two-thirds of that seven-billion dollars is coming from a customer who’s under twenty years old,” he added. In addition, he notes that American Eagle/Abercrombie have 900 stores combined, accounting for three-billion dollars in sales.

In all, these two chains generate ten-billion dollars in sales — money that could potentially be spent in surf shops and boutiques. “They’re a force to reckon with,” he said. “They have created an unrealistic expectation of what value is today.”

Weaver also dished out some PacSun statistics. The company manages 700 stores in 48 states, including Puerto Rico, and plans to operate 1,000 locations by 2003. Each one of PacSun’s top-tier stores generate 2.5- to 3.3-million dollars in sales annually. There are more than 10,000 PacSun employees, 75 percent of whom are teenagers.

Love it or hate it, PacSun is here to stay. And Weaver can take the heat: “For every 50 people that think you’re brilliant, 50 people will think you’re an idiot,” he said. “You know what? I’m 47 years old — it just is what it is.”

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For more coverage of SIMA Surf Summit 4, including coverage of the women’s market, the future of professional surfing, and the retailer panels (including the latest on the ongoing trade-show war), check out the June issue of TransWorld SURF Business — hitting your mailbox June 14.

Need a subscription to TransWorld SURF Business? E-mail your name and address to sean@twsnet.com. U.S. subscriptions are free; international subs cost 25 dollars.