California Apparel News

Competition has never been much of a worry for the nearly 20 years that Active has been in the retail business. But the surf, skate and fashion purveyor may be in for a shock this August.

Since its start-up in 1989, the small chain of stores has grown and thrived by building many of its boutiques in the newly minted neighborhoods that dot the suburban Inland Empire region east of Los Angeles, which has been riding a wave of residential construction.

But in August, Active is headed west. The Chino, Calif.–based company will open a flagship store at 1460 4th St. in Santa Monica, one of the more bustling and competitive retail markets on the West Coast.

Active’s new store will be just a block over from the Third Street Promenade, a pedestrian retail area. Across the street will be the flagship store for skater icon Vans Inc. And a block away will be Fred Segal, one of the most esteemed names in specialty retailing on the West Coast.

Shane Wallace, Active’s 33-year-old president, said he was honored and humbled by being in the same neighborhood as such stellar retail names. But he knows exactly what he is doing. He expects the distinction of Santa Monica’s name to kick his company into high gear just as it is preparing to double its store count over the next five years, from 15 to 30 boutiques, around Southern California.

“It’s a new challenge,” Wallace said of his company’s move. “But we want to lead. And if we want to lead, we have to be located in a world-class retail destination.”

The need to lead also might be the need to survive, said Jeffrey Van Sinderen, a retail analyst at financial services firm B. Riley & Co. in Los Angeles. “There are more major players dedicated to the action-sports lifestyle. It’s harder to stand out,” he said of the marketplace that features such tough surf and skate contenders as Zumiez and Hollister, as well as established players such as Quiksilver and Pacific Sunwear of California.

But Active has thrived because it carved an independent path. It was one of the first to mix the once-exclusive retail categories of skate and fashion.

Its brand name holds a stylish cachet with skaters and boardsports enthusiasts, ages 14 to 20, who want to be fashion- forward but not look like stereotypical skate rats, said Frank Delgadillo, founder of Ambiguous, an Orange County, Calif., lifestyle label that is sold at all of Active’s stores.

Active takes a lot of chances by mixing surf brands such as Billabong and Hurley with premium-denim brands such as G-Star and Diesel, Delgadillo observed.

“They’re not afraid to buy the fashionable pieces. They’re not looking for the price point pieces,” he said. “For example, they’ll buy all of our fashion pieces and maybe one of our basics.” Active’s price points range widely for denim, from $50 to $350, which includes its premium jeans.

The focus on fashion and new styles for the surf and skate crowd has proved profitable. Active’s sales in 2005 totaled $52 million, a 25 percent increase over 2004, Wallace said. When Active took over a 5,572-square-foot space at The Camp specialty shopping center in Costa Mesa, Calif., 18 months ago, sales there increased 80 percent compared with the previous tenant, Billabong, according to Shaheen Sadeghi, the center’s owner.

Personal financing

Its sales have given the 400-employee company enough capital to fully finance its expansion, Wallace said. The company invested hundreds of thousands of dollars to give its Santa Monica store a look fitting its high profile, he said.

At its entrance, shoppers will be greeted by a 12-foot-high eyewear display. Nearby, vintage surfboards from the 1950s and ’60s will line a wall. Past that will be the main store, with its 2,500-square-foot menswear section, a 2,000-square-foot shoe department and, toward the back, a 1,500-square-foot womenswear section.

The emporium will have murals painted by Shepard Fairey, one of the founders of the streetwear brand Obey, based in Santa Ana, Calif. Other in-store art will feature photographs of Santa Monica’s and Venice’s skate scene history, as well as a crafts section featuring pottery and another section dedicated to skateboards.

Wallace literally bears the bruises of someone who lives the boardsports lifestyle that Active has been serving. During his interview with California Apparel News, the retailer walked with a limp, the aftermath of taking a fall at a skate park, where he bruised his left thigh. On June 7, he won second place for the over-30 category at the Willabong Classic surf competition in Carlsbad, Calif. At the same time, Wallace has been married for 11 years and has been managing Active stores since he was 18. The company was co-founded by his father, John, now Active’s chairman.

Understanding its consumers’ lifestyles is just part of Active’s recipe for success, said Andy Tompkins, group show director for the Action Sports Retailer Trade Expo. Active has been a well-regarded buyer at ASR, a San Juan Capistrano, Calif.–based trade show for the surf, skate and snowboard industry.

“They create that feel, look and touch of an independent skate shop,” Tompkins said. “But they have the benefits of a specialty store, while having the economies of scale of large retailers.”

If you build it

Growth has been key in maintaining market share for surf and skate shops. All of the top players have been on an expansion spurt in the last two years.

Anaheim, Calif.–based Pacific Sunwear has dominated shopping centers across the country with 820 retail locations, adding eight Pac Sun stores in the first five months of this year. Southern California specialty retailer Jack’s Surf built several stores in Orange County, and Beach Bums of Anaheim has built more than half a dozen locations throughout Southern California and one in Las Vegas.

Active intends to open six stores annually for the next few years, Wallace said. He characterized his company’s growth as one relying on developing a specific niche among fashionforward boardsports enthusiasts. In Santa Monica, he’ll strive not to overlap brands carried by neighboring stores. For example, Active will sell Vans shoe styles different from those sold at the Vans store across the street, Wallace said.

At the same time, however, some overlap can’t be avoided. Instead, the store will have to differentiate itself by developing its own special personality. “Our exclusivity is the experience we provide,” Wallace said. “We’re mixing boardsports with art, fashion and urban culture. It’s a realness and authenticity that you may not find at other places in the market.”