OCTOBER 23, 2006
Small Biz
By Jeffrey Gangemi
Board Sports Retailer Still Skating
Sessions, an independent skate apparel retailer, retains street cred with its young customers and still manages to grow without selling out
Like the snowboarders he idolized, Joel Gomez laughed at danger in 1983 when he dropped out of San Jose State University a couple of credits shy of a degree in accounting and opened Sessions, the world's first snowboard shop, in Sunnyvale, Calif.
Just 21 at the time, Gomez was hooked on snowboarding and other board sports and had scraped together $21,000 through loans from family and friends to follow his dream. "It wasn't scary," says Gomez. "It never crossed my mind that I wouldn't make it, and I didn't think of all the bad things that could've happened."
Youthful optimism paid off for Gomez. Last year, his 23-year-old, independent company, now devoted exclusively to making and selling apparel for skateboarders, snowboarders, skiers, and surfers, had sales of more than $10 million and grew about 15% in the same time span, with distribution in 50 states, as well as Canada, Europe, Australia, New Zealand, Korea, Taiwan, and Japan.
Riding the Wave This year, Gomez expects his company, now based in Scott's Valley, Calif., to grow by at least another 10% overall despite the monumental production operations of competitors such as Billabong and Quiksilver (ZQK), which makes it tough for Gomez's company to compete on price and design alone. For Sessions, staying afloat means retaining street cred in a market that caters to antiestablishment young consumers, while trying to grow at the same time.
Sessions' survival is an anomaly in the competitive action sports industry—worth an estimated $15.1 billion. Many of the other independent alternative sport apparel makers such as Adio Footwear and Volcom have long since sold out to bigger entities or gone public (see BusinessWeek.com, 8/14/06, "Volcom: After the Wipeout").
No doubt those infusions of money helped these and other brands grow through robust advertising campaigns and the resources to pay the best riders to join their teams of sponsored athletes—considered one of the most important marketing tools in the industry.
Got to Keep It Real But as skateboarding and snowboarding have gone mainstream, Sessions has continued to walk the line. "Some skate brands use money from outside sources or larger companies to build teams with high-paid marquee athletes, but this approach usually doesn't work unless the team riders are really in it for the brand and not the money," says Michael Marckx, vice-president of global marketing for Globe International, a skateboard shoe company based in Melbourne, Australia.
"Bogus or ill-formed teams put together with money instead of spirit are sniffed out by the industry and core skate kids very quickly," he adds.
Sessions' team is the real thing, judging by the company's longevity. Gomez's philosophy of staying connected to his customers and to the sports they love—Gomez himself still skates often—is what he says has attracted such greats to his team of riders, including skateboarding legend Steve Caballero.
A Matter of Lifestyle In fact, the team may be the single most important element of Sessions' success. "No matter what, a skate brand is only as good as its team of riders. The team is of paramount importance. Skaters come and go, and so do brands, as a result," says Marckx. Sessions sponsors teams of riders in skateboarding, snowboarding, and skiing, and it largely promotes its brand through contests in an industry that tries to attract a loyal following by showing it supports more than its own bottom line.
"Sessions promotes not only their product, but also the lifestyle. This industry is very youth-oriented, and trends change. It's to their credit they've been able to be so successful," says Andy Tompkins, group show director for ASR, one of the biggest action sports industry trade shows.
Sessions' staying power has also hinged on its ability to cater to changing trends and fickle youth. In the early days of his retail store, when snowboards weren't available in some places, Gomez started selling boards and clothing via mail order. His business has since morphed again and again, from snowboards to skateboard gear to punk rock T-shirts to today's apparel business: clothing designed by team riders with names recognized and respected by young buyers.
Believing in What You Sell And while punk rock T-shirts are no longer part of its sales equation, the company's connection to music carries on. Sessions has put out 15 vinyl records, from groups like the Descendents and the Foo Fighters. Early next year, Sessions will release a 7-inch collector's record with two previously unreleased Pearl Jam songs.
As with most of his enterprises, Gomez doesn't run the music part of his business solely to maximize profit. He says he does it because he's passionate about vinyl records and supporting his favorite bands. It's just another one of the ways Sessions continues to prove its credibility with its target market.
Punk Rocked to Death It's not just street cred that allows you to succeed in the action sports industry. Staying cool is essential, but Gomez says he's had to temper his "cooler than thou" approach to meet the changing demands in the business. Ten years ago, if a multi-store sporting goods chain had been interested in an account, Gomez wouldn't have given them the time of day.
But today, in the competitive world of action sports, his company's existence depends on Gomez's veteran business skills that help him know when to forge a deal. "I think we almost punk rocked ourselves out of business years ago," he says.
Gomez acknowledges he's still living his dream, though he does occasionally consider selling out, if only to be able to sleep "two of [his] team riders to a hotel room, instead of three."
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