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To be successful in this market, a company must first be considered core, a catch-all term for unbridled living of the extreme- sports go-for-it ethos. "To be perceived as core is alternative-marketing gold," says James Palczynski, vice president and analyst at Needham & Co. If you are selling skatewear, then you had better be a skate rat, and your company had better sponsor a team of top skateboarders. But core is more than an aggressive, participatory attitude. It's also a vibe, a quasi-mystical, anti-Establishment subtext that has to permeate a firm and come across in marketing and advertising so that it resonates with trend-setters up and down the coast and then across the country.
There is a subtlety to being core. Some companies, including Jimmy-Z, Vision Street Wear, Mossimo and Gotcha, start out core but make a wrong turn. It can be an ill-conceived magazine advertising campaign (Mossimo). Or turning up in J.C. Penney's rather than the local skate shop (Jimmy-Z, Gotcha).
A brand trying too hard to be core, such as Mountain Dew or Nike, is by definition not core. "You can't buy your way in," says Don Brown, 32, vice president of Soul Technology, a growing skateboard-shoe company with $40 million in annual sales. "Look at Nike. They're the best marketing machine in America, and they couldn't buy their way into skateboarding." Ironic that in the pre-nose-ring generation, Nike invented core. Coreness can reach ridiculous extremes. Almost every Velcro Valley firm has erected a half-pipe skateboard ramp on its premises. "We used to have one right out in the middle of the place," says Volcom's Woolcott, "but skateboards were, like, hitting people at their desks." Bummer.
For those who succeed in communicating core, the youth-apparel industry is a wholesome business activity. Teenagers spent $91.5 billion last year, and the men's and women's active-wear markets grew from $69 billion to $73 billion, according to the NPD Group. For leading Velcro Valley manufacturers like Quiksilver, that means a one-year, 37% increase in sales, to $316 million. Smaller firms like Hurley, Split, Girl, World, Ezekiel, Rusty and Shorties are reporting steady growth on sales of anywhere from $10 million to $70 million.
These explosive growth rates cause companies to confront the recurring Velcro Valley conundrum: What starts out as a couple of bros silk-screening T shirts and writing invoices on brown paper bags can quickly grow into a multimillion-dollar business. When that happens, it gets a little harder to take the afternoon off to go surfing. "If you want to grow," says Danny Kwok of Quiksilver, "you gotta give away a little bit of your life-style."
Down the street from Quiksilver, Woolcott says he is not interested in growing if it means sacrificing any portion of the life-style, which includes taking off whenever he wants on a surfing safari or snowboarding trip. "Getting bigger is totally secondary," he says. "I don't want to put pressure on what we're doing. I don't even think about getting Quiksilver big." Woolcott's office is festooned with Sex Pistols posters and Volcom's mission statement: YOUTH AGAINST THE ESTABLISHMENT.