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CA skateboarders and COVID-19: Demand up, equipment down

A skateboarder in action. (Photo: Shawn Henry)

Shelter-in-place has pushed consumers of varying ages to skateboarding in unprecedented numbers, creating a dramatic increase in participation and sales.

Unfortunately, California’s COVID-19 regulations have also slowed the manufacturing and distribution of skateboard equipment, causing historic supply disruptions. Although China and Mexico arguably produce the bulk of modern skateboard equipment now, California manufacturers like Skate One, and distributors like Deluxe and NHS, remain essential links in the global skateboarding supply chain.

“China went down first from the CV (coronavirus) shutting off most supplier’s flow of products,” says George Powell, president and founder of the world’s largest skateboard company, Skate One, which owns his pioneering brand Powell-Peralta. “Then the U.S., then Mexico.”

“As soon as the equipment is ready, everybody vultures on it, and retailers are fighting for it.” —  Chris Nukela

Powell’s companies have been producing skateboard decks and wheels in the United States for 44 years. During that time, he has weathered the industry’s ups and downs, had to borrow money, shrink staff, and get the company through what he called “the Dark Ages” in the early 1980s, only to rise again as interest in the sport resumed. Powell has never experienced a pandemic.

Before the pandemic, 40 to 60 people normally worked day and night at Skate One’s Santa Barbara factory, making most of the company’s decks and wheels. Their warehouse was the largest skateboard manufacturing and distribution site in the world. Since the pandemic, smaller teams struggle to keep up with demand. Companies like Deluxe in Oakland have skeleton crews working around the clock in their warehouse to produce and ship products, but as one Portland, Oregon skate shop clerk described, “[T]hey go up for sale on Monday, and they sell out Tuesday morning.”

Skate shops of all sizes, and consumers, are feeling the pinch.

“It’s a problem,” says Dave White, owner of L.A. Skate Co. In business for 42 years, L.A. Skate Co. is arguably the oldest skate shop in Los Angeles, and they have historically stocked one of the world’s largest selections of boards. They still have a large inventory, but shortages require they buy more carefully. “I have a store full of stuff, but half the time nobody wants what you have, so.”

“As soon as the equipment is ready, everybody vultures on it, and retailers are fighting for it,” says Chris Nukela at Portland, Oregon’s Cal Skate, the world’s oldest continuously operating skate shop. “Every aspect of the skateboard world is just weeks and months behind.”

The commercial skateboarding market dates back to the 1960s, when California surf companies like Hobie began producing retail boards.

“I think we’re in for kind of a downward spiral for the next month or two,” says Jim McDowell, cofounder of Rip City Skates in Santa Monica. “It could get worse. Right now it’s bad enough. I’ve been here for 40 years, and I’ve never seen anything like this.”

What does the future hold?

“We are currently backlogged about three-to-four months at current production rates,” says Powell, “and from what we hear, so are our competitors, so you can expect to find you are not able to find exactly what you are looking for, and in some cases anything at all, to satisfy your desire to skateboard. I expect the market to ‘settle back down’ by Christmas, but with all the wildcards being played by politicians and governments, it is hard to predict. We are doing our very best, but it is a crazy market environment right now.”

California surfers invented modern skateboarding sometime in the 1940s or ’50s using roller skate wheels, wooden crates, and crude pieces of wood, but the commercial skateboarding market dates back to the 1960s, when California surf companies like Hobie began producing retail boards.

Although skating is now a global phenomenon with innovators around the world, the sport’s most famous brands of gear – from Powell-Peralta decks to Independent Trucks to Slime Balls Wheels – started in California, and its iconography and culture will always be associated with the Golden State.

The sport has come in and out of fashion, and companies’ fortunes fluctuated.

The market generated approximately $4.8 billion in annual revenue in 2009, when over 11 million people skated worldwide. In 2019, Action Watch estimated that there were 6.6 million skateboarders in the U.S. alone.

Patrik Schmidle, president of Action Watch, which gathers data and consults with retailers in the skate and surf industries, describes a dramatic increase in sales of all skateboard hard goods (decks, bearings, wheels, complete boards, protective equipment) from June 2019 to June 2020. Schmidle anticipates that, based on the numbers they’ve been collecting through June, the U.S. will have another million skaters by the end of 2020.

“We have not seen this big a surge in skating since the ‘golden age of skateboarding’ that occurred between 1983 and 1989,” George Powell says, “when Powell-Peralta led the industry and the number of customers increased by about 200X or more (no one really knows). Our company was backordered for four years as we attempted to meet demand.” The reason? Increased participation.

Powell attributes skating’s inclusion in the 2020 Olympics as one factor driving sales. COVID is another factor. Shelter-in-place has pushed consumers of varying ages to skateboarding, which is a relatively autonomous activity that Powell calls “something outside that is fun, cheap and can be done at home or nearby.”

Patrik Schmidle agrees. “Certainly, the pandemic has accelerated that existing trend dramatically,” says Schmidle. With competitive team sports canceled because of COVID, kids’ calendars have been cleared. Parents are trying to work. They want their kids outside. With few team sports to participate in during COVID, kids are searching for other athletic activities that can be done while adhering to social distancing guidelines: meaning, skateboarding, biking, roller skating, boogie boarding, and surfing.

“Every time they relax the restrictions, nfections spike. They don’t know what to do.” — Jim McDowell

Action Watch hypothesizes that this unprecedented increase in demand is also intergenerational. Many people like me who skated as kids have returned to the sport in their 40s. Some older skaters have introduced their kids to skating, enjoying an activity they can do together with their daughters and sons. This range of gender and age creates a lot of demand for product. Increased demand has intersected with decreased supply to create a perfect storm.

George Powell has observed ten year cycles of growth and shrinkage in the industry. Before COVID, skating was enjoying a boom. “The industry was coming off a four-year decline,” says Powell, “until 2019 began a strong new cycle amplified by the Olympics as I mentioned above. Growth was strong in 2019, as in 20-to-25 percent, but then the CV shutdown caused most suppliers to send their employees to work from their homes or lay off their employees right during the normal spring upsurge.”

Limiting the number of workers in California’s manufacturing and distribution warehouses is a necessary but complicated safety measure with tangible repercussions. 

“It’s like the meat packers,” says Rip City Skates’ Jim McDowell. “They all stood next to each other, and they all got sick.” The difference, McDowell points out, is that, unlike food production, skating is a luxury. “We need food. We need those truckers delivering food. We don’t need skating.” This from an industry veteran whose customers regularly tell him how skating is helping them psychologically endure this pandemic. If there’s a way to get sufficient workers safely in a California manufacturing or distribution warehouse, McDowell can’t see it. “Every time they relax the restrictions,” he says, “infections spike. They don’t know what to do.”

As Chris Nukela at Cal Skate put it, “When’s the normality coming back? There’s no real answer.”

So far, larger, older shops have the cash flow, back stock, and established relationships with manufacturers and distributors to handle the industry’s inventory issues. Small shops do not, and their businesses are at risk.

“Some are buying as much as they possibly can, so that creates a shortage in the market.” — Dave White

“I have probably more contacts than most people,” McDowell says of Rip City Skates, “so I’m able to survive. But like this morning: It was really difficult trying to get merchandise. The average skate shop is owned by some kid who doesn’t have the resources that we do. Not so much cash flow, but that too. You’ve got to have people that will take care of you, and those relationships [with manufacturers] are built over many years. Not a year or two, I’m talking 20, 30, 40 years.” McDowell cofounded Rip City Skates in Santa Monica in 1978.

“Some companies are limiting purchases to 10 boards. [Small new shops will] be out of business if it keeps up for another month or two. The bills keep coming. You gotta pay your insurance, you gotta pay your rent, you gotta pay your employees. It’s like the restaurants, those poor guys.” What about the Federal stimulus package? “Stimulus package? No, that doesn’t mean shit,” McDowell added.

Cal Skate is fortunate too. “Most skate shops are surviving on 10 to 40 skateboards. We have about 400,” says Nukela. Founded in 1976, Cal Skate is not the world’s oldest skate shop, but is the world’s longest continuously operating skate shop. Its relationships with manufacturers and distributors help it get stock. “Most shops can’t keep their inventory up, and there is no cash flow. So stuff comes up and they go, ‘Well, I’ll get as many as I can get,’ which is often 15 or 20 boards for a lot of shops at a time, and demand is just so high that they run out right away. Then they have to wait weeks or months for the distributors to restock. For us, we’ve been around so long, we are one of the biggest skate shops on the West Coast, if not the entire country, so luckily our owner has done such a good job that we have the financial stability that most shops don’t.”

Dave White at L.A. Skate Co. believes hoarding has exacerbated existing supply issues. “With shortages, it’s like buying too much toilet paper,” says White about companies in the shipping supply chain. “Some are buying as much as they possibly can, so that creates a shortage in the market.”

“We are all just now coming back on line in a major way, but there is a big back log of unfilled demand to fill.” — George Powell

Besides the stock issues, California restrictions on gathering and social distancing make it difficult to safely run a retail business. Rip City Skates is only 600 square feet, and McDowell and staff have to limit the number of people who enter. “When I get a lot of people in here,” he says, “I have to ask ’em to leave and work on them individually. It’s tough.”

To be safe, L.A. Skate Co. went further and closed its showroom to visitors, offering daily curbside service instead. Even though it’s a 2,600-square foot store, Dave White says it cannot provide customers sufficient room to spread out. White says state regulations won’t allow customers to try on items like shoes or roller skates and take them back, so right now, all of L.A. Skate Co.’s sales are final. He remains optimistic about the industry’s future and a coronavirus vaccine, but he knows that his store could only survive for between three and five months if the state completely shuts down business again. “If it went past that,” he says, “I wouldn’t be able to pay rent. There’d be no income.”

Skate One moved their enormous facility from Santa Barbara to Ventura in April, during the start of the pandemic. The plans were already in motion when COVID hit. Thankfully, the company produced a surplus of product to carry them through the move, and this serendipitously allowed them to fill orders in April and May when competitors could not.

“We seem to have been the only large company that was able to supply during April and May for a variety of obtuse reasons,” Powell says. “Our largest competitors were not quite so lucky, and found themselves shut down for over two months. We are all just now coming back on line in a major way, but there is a big back log of unfilled demand to fill. So, the strong demand from a new generation of skaters all around the world (because of the Olympics), the pent up demand caused by the CV shutdown, and the supply chain interruptions all combined to cause the out of stock situation you found when you went to buy a skateboard.”

Everyone knows they can only wait and see where the industry is at in September.

As the old saying goes, “Skate or Die.”

 


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