California Apparel News

Canada continuies to build momentum as an integral territory for surf and action-sports lifestyle brands.

On the hottest summer day on Canada’s west coast, the ocean water still isn’t warm enough to surf bare-chested and in boardshorts. One of the top surf tourism destinations in the country—Tofino on Vancouver Island, which hosted the self-explanatorily named O’Neill Cold-Water Classic surfing competition in 2009 and 2010—has a population of less than 2,000 year-round residents, yet it sees 1 million tourists per year, according to Tourism Tofino.

America’s northern neighbor might not possess the same year-round climate or population as other well-known surfing epicenters, but Canada has become an essential selling territory for surf and action-sports brands. The cool-guy surfer image—and the brand logos they wear on their sleeves—resonates, no matter how frigid the waves are.

“People buying [the brands] based on the fashion are more or less recreational—just your average person into that lifestyle that’s going to wear it to the beach in the summer months,” said Perry Pugh, general manager of exhibitor relations for the Know?Show, western Canada’s trade show platform for action-sports brands.

The Know?Show was founded in 2006 by Pugh, Ben Couves and Nick Brown and is held twice yearly in Vancouver, British Columbia. Pugh estimates that 60 percent of retailers attending the Know?Show are considered lifestyle shops and 40 percent are core action-sports shops that sell both hardgoods and clothing.

“The [apparel] brands are just accepted for what they are,” Pugh said. The boardshorts, for example, serve a multifunctional purpose in Canada’s rugged terrain—rich with forests, lakes and rivers—and for other watersports in the warmer, inland lake regions.

Shifting retail tides

Deep-pocketed companies in the surf/skate/snow industry have recently staked real estate claims in Canada, thereby rattling the retail playing field of the Main Street mom-and-pop shops. Mall-focused retailer Zumiez, which operates more than 400 stores in the United States, opened two stores in Canada this year. Billabong purchased the privately owned West 49 chain of 138 primarily mall-based stores (a Canadian Pacific Sunwear–meets–Zumiez–style chain) for $99 million Canadian last year.

“We had a much larger proportion of independent boardshops to chains that were financially healthy,” said Scott Prunier, sales and marketing manager for Insight Canada and Nikita North America. “Now, with Zumiez, Journey’s and Target coming on top of Canadian heavyweights [sporting-goods retailer] Forzani Group, West 49 and [action-sports-brand retailer] Boathouse, that’s a lot of mall-based stores for such a small population,” Prunier said.

Vancouver-based surf brand and retailer Sitka is aware of the onslaught but not worried about Goliath chain stores stomping it out. Sitka is one of Canada’s few action-sports lifestyle brands that manufactures a clothing collection, sponsors riders, and produces surfboards and skateboards. Sitka operates three flagship retail stores (in Vancouver and Victoria, British Columbia, and one in New Zealand), which also sell clothing by Insight, O’Neill’s Kings of Freak line and Raen Optics.

“We know who our customer is. They are not the type of person that goes to a chain retailer store to shop,” said Joel Hibbard, manager and men’s buyer for the Sitka store in Victoria.

“They don’t want that generic, mass-produced product. Eighty percent of what we carry isn’t available in a store like Zumiez or West 49. As brands grow and are looking for new avenues of growth, we may see brands from our shop go into bigger stores, but that’s why we continue to push for that fresh, edgier product to have on our shelves.”

Noelle Quin of HTO surf shop in Victoria agreed that as the well-known brands reach maximum exposure capacity, newer brands have an opening to snake into the lineup. “When we shop, we need something new and exciting that we can bring to the table that our neighboring shops don’t already have,” Quin said.

Gateway to international exposure

For the Know?Show’s Aug. 17–19 edition at the Vancouver Convention Centre, more than 200 brands are signed up to exhibit across 60,000 square feet. The floor map includes stateside brands Vans and Volcom as well as younger lines such as Herschel Supply Co. accessories. More than 1,000 retailers representing approximately 500 doors throughout Canada are expected to attend.

These exhibitor and attendee numbers have held steady for the past three years. Because of its close geographical proximity; similar customer taste; and relatively less-complicated taxes, duties, customs and shipping, Canada is a valuable training ground for small California brands that want to learn the ropes of international business.

Newport Beach, Calif.–based Hippy Tree has exhibited in the past at the Know?Show and employs a sales rep based in Canada. The brand’s niche targets the intersection of surfers and outdoorsy rock climbers—as perfect a fit for the Canadian marketplace as a greasy food truck parked on the sidewalk outside of a bar after last call. HTO surf shop cited Hippy Tree as its best-selling T-shirt line.

“It’s definitely been a huge growth part for us,” said Josh Sweeney of Hippy Tree. The brand expanded into the same array of stores in Canada that it targets in the U.S.—surf, lifestyle boutiques and outdoor retailers—and received “a good response, especially from outdoor shops up there.”

Taking your brand to Canada

Manufacturers selling to Canada can hire a local sales representative (such as Hippy Tree did), work directly with retailers or work with a Canadian distributor. Depending on the size and goals of the company, there are pros and cons for each avenue.

“The Canadian distributors do a great job for a lot of things, but [having a sales representative] dealing direct with American brands is a nice thing because there isn’t one more middleman to take a few more dollars out of the process,” Sitka’s Hibbard said. However, he added, it has its drawbacks. The American rep may not be aware of the international shipping and tax rules. And Sitka sometimes has felt “overlooked” because of the store’s distance from the United States.

Darren Hawrish, president/chief executive officer of No Limits distribution, based in Vancouver, said the 18-year-old company handles all of the details for an American brand that wants to sell in Canada. His current client list includes Sanuk, Lifetime Collective, Obey, Lira, Capita snowboards, Coal headwear, Osiris skate shoes and Famous Stars and Straps.

“We don’t want to go out and just get sales; we want to look after the brand itself to build equity for that brand in the Canadian market,” Hawrish said.

Whether it was looking for a distributor or sales representative, the locals agreed on a laundry list of facts that prospecting companies should know: Canada’s population is roughly 10 percent of the United States’, so sales numbers will likely follow the same ratio. Southern California retailers may stock boardshorts year-round, but in Canada, surf-inspired, warm-weather threads are strictly seasonal. That means on-time deliveries are critical to maximize the four- to five-month selling period.

On a positive note, Canadians overall are a notch higher on the spend-happy scale than Americans.

Canadian brand Sitka has seen organic growth and awareness in its wholesale sales and direct-to-consumer sales online (which include U.S retailers and customers), and its retail stores are chugging along.

Hibbard said, “I don’t think the Canadian consumer is as worried or in as much of a dire financial situation as the American one.”