Pro surfers and surf brands are, at times, rolling in more cash than they appear to know what to do with. Occasionally this leads to some interesting "investments.” From buying into a favorite sports team to surfboards that fold in half, here are some of surfing's worst business moves.
Invest in your favorite sport's team
Joel Parkinson recently lost a $446,000 investment in his hometown rugby-league club, the Gold Coast Titans. Parkinson is a Titans fan, and his manager, Michael Searle, was the club’s CEO. However, when the club was forced to be taken over by the sport's governing body due to its debt, all the investors, including Parkinson, lost their money.
"I love my footy, and getting behind the club financially was my way of showing my support for footy on the Gold Coast," Parkinson told the Gold Coast Bulletin. While it may have been good for local rugby, it sure wasn't good for the 2012 world champion’s bank balance.
Embark on mass expansion (a year before the GFC)
Just prior to the Global Financial Crisis, most of the big surf brands were guilty of using their previous success and available credit to set up elaborate expansion plans. Billabong invested heavily in retail property space and other surf and skate brands, which, when the GFC happened, caused the company problems.
In June 2007, the company's share price listed on the Australian Stock Exchange reached an all-time high of $A18.30. By June 2013, it had plummeted to a low of just 13 cents.
Quiksilver suffered similar problems, best shown by their purchase of the ski brand Rossignol in 2005 for an amount valued between $320 and $500 million in cash and stock. Just three years later, suffering from high debt levels near $1 billion, they sold it for $50 million.
On paper, the idea of a wave pool should be a license to print money. I mean, who doesn't want to surf waves on tap? However, the gap between the principle and actually making money seems to be vast. Despite the first pro surfing competition being held in Allentown's Wave Pool in Pennsylvania in 1985, 30 years later the idea is still mostly a dream.
The longest-running and best wave pool, Japan's Ocean Dome, closed in 2008. Dubai and Malaysia both have successful centers, but neither are fully open to the public. The Basque Country's WaveGarden is the same, although their technology is to be used in a public center opening in Wales this summer.
Elsewhere, much-publicized versions like the Kelly Slater Wave Pool and Greg Webber's version have yet to come to fruition, while crowd-funding sites are awash with syndicates requesting fund for new pools in Brisbane, Melbourne, and California.
As it stands, though, the cost of building and running artificial waves seems much more than the amount people are prepared to pay to ride them. Until that changes, while they may be a whole lot of fun, they don’t seem good for business.
A cologne for surfers
When three-time world champion Mick Fanning posted an image of himself with fellow professional surfers Joel Parkinson, Bede Durbidge, and Josh Kerr, advertising a new cologne called "Ocean Mist by Surfers 4," the surfing world went into mild shock. It looked like it just might have been one of the worst surfing business ideas ever.
Stab magazine said, "Who on the Good Laird's blue earth could've predicted that it'd be grooming products emerging from the mystery around Surfers 4?"
Well, no one, as it turns out.
"That was just a prank and I can't believe everyone fell for it," Fanning told GrindTV. "It was used as a teaser for our real launch of our new beer company, Balter. Beer and surfing, now that makes more sense than perfume, don't you think?"
We do, Mick, we do.
Do things by halvesEvery few years, it seems some surf innovator pops up with a business based around a surfboard that folds in half.
The goal here is that it provides a functional surfboard in the water and a 3-foot piece of kit when you are traveling. The best of both worlds, right? However, all the prototypes use a hinge-type system or dowel rods that click into place, which tend to jeopardize the bottom contour of the board and negatively affect its performance.
"The Worst Idea Ever, Dude"
Starting a new surfboard- and boardshort-making business is a fairly bad idea to begin with. There's the crowded marketplace, the surf industry's problems, and the money involved. To start one in a freezing-cold country with no waves and few surfers, like Denmark, seems like madness.
That's what Oh Dawn did, though, and such were the obstacles that Ford made a video of their plight and titled it "The Worst Idea Ever, Dude." Despite the bad idea, the brand has experienced rapid growth.
Maybe even the worst ideas are better than no ideas at all.
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