California Apparel News

Scott William Bass is a curious combination of surfer, journalist and financial executive. Bass is the editorial director of Primedia Inc.’s action sports group, which publishes Surfer, Surfing, SG, Skateboarder and Snowboarder magazines.

When he isn’t writing about business and lifestyle for the surf industry, he secures capital for small surf businesses through privately held funding companies. As president of the Seaside Funding & Capital Group, a 4-month-old San Diego–based boutique financial company that services small businesses, Bass’ goal is to grow the surf industry’s army of apparel and hard-goods manufacturers.

California Apparel News Manufacturing Editor Claudia Figueroa recently sat poolside with Bass to discuss brand marketing and other business strategies for newcomers to the surf industry.

What is the business environment for the surf industry right now?

The surfwear business environment is tight, but, at the same time, it is always ripe for a new and innovative brand. The big dogs of surfwear [for example, Billabong USA, the Ocean Pacific Apparel Corp., Quiksilver Inc. and Hurley International] will always be there, but there is plenty of room for new brands. You just have to be smart, innovative and a risk taker.

What type of clients are you looking for?

Small- to medium-sized apparel businesses and hard-goods suppliers. We’re looking for a company that is somewhat established and has retail accounts in place. We want to provide them with the capital necessary to help implement their plan. If they want our advice, we will give it to them, but we’re not a consulting firm.

What are some of the challenges for new surfwear companies?

Proper marketing is a big challenge for small companies. You can have a unique product with a very unique identity and vibe and still go out of business if you don’t have intense, innovative marketing. Most companies run ads in magazines, and it’s a constant challenge to think outside the box. You’ve got to have a solid, unique marketing plan and stay the course. Your product might be insane: unique fabrics, cutting-edge design and breakthrough materials. All of this doesn’t matter if the kids aren’t going into the core retailers—the surf shops and skate shops—and asking for your product.

Volcom’s ads are directed toward a diverse consumer base. They’re a surf company, but they’re more than that; they’re a lifestyle brand that appeals to skate, snow and music lovers. Marketing-wise, Volcom touched all of those aspects when they melded a combination of surf-inspired clothing with angst-filled skateboard mentality and tied it up very nicely with streetwise musical promotion.

How much does it cost to launch a small surfwear business?

If you want to run with the big dogs of surf apparel, you are going to need to start with about $30,000 just for a grassroots effort.

How does guerilla marketing play a role in the surf industry?

These tactics are inexpensive but directly touch your consumer base. For example, Volcom launched the Volcom Totally Crustaceous Surf Tour, a series of absolutely freeto- the-kids surf competitions held on both coasts and in Hawaii. The surf consumer is hypersensitive to authenticity, mainly because it’s an enthusiast-driven market.

Hurley International has outfitted musical groups like Blink 182, which is also a great marketing plan. All of a sudden, the band is on MTVwearing Hurley. Guerilla marketing is being able to touch the core consumer inexpensively and in a unique and authentic way.

How important is factoring for start-ups in the surf industry?

Small companies are either in growth mode, or they are in survival mode. Sometimes they are in both modes at the same time. Cash flow issues squeeze companies out of business every month. With factoring, you get virtually instant access to your accounts receivables. This is good for a number of reasons. If you are in growth mode, you can take the cash and turn around to your materials suppliers and get a discount—pay them off instantly. Now your company has materials to fill the orders that are swamping in. Or you can take the cash and ramp up your marketing needs.

Factoring is crucial if you are in survival mode, as well. The fee varies between 2.5 percent and 3.5 percent for 30-day invoices and increases a point for every 10 days after that. Accounts receivable financing will help you make payroll, pay payroll taxes and get through rough spots so that you can hang in the market long enough to gain traction. This business is a marathon, not a sprint.