Rip Curl stays true to its technical roots
Faced with a market decline and economic difficulties, major players in the small word of surf brands are diversifying their strategies. Rip Curl is up against Quiksilver that shoots for the largest distribution and Oxbow that focuses primarily on ready-to-wear. So the company staked out its territory this spring — innovation and technology for products designed mainly for sports, both summer and winter.
“This is what we do best and what we like most,” said Olivier Cantet, Rip Curl CEO, during an interview held Tuesday morning in Paris. Cantet was eager to revisit and defend the Rip Curl strategy while talking about the company’s new fall-winter collection 2013/2014.
The Flash Bomb wetsuit is one example of the new strategy, equipped with a lining that has 30% more stretch, making it lighter and easier to move in. The item also includes a drainage valve to release water, of course not allowing water to get back inside. These innovations are not just a detail for Olivier Cantet.
“There is an increase in winter surfing into October, which is the month with the strongest waves in Europe, especially in France. And, in order to surf then, you need highly technical products,” he said. To avoid any transfer of technology to the competition, Rip Curl even has its own manufacturing unit in Thailand for such products.
The technology approach is also shaping prep or après surfing products and mountain wear, with more stretch through cocona membranes, a material made from coconut that promotes air circulation and prevents any internal moisture.
Along these lines, Rip Curl has also launched a new practical segment dubbed Anti Series, developed the company's Europe branch for international distribution. The idea is to design outerwear that can be worn in the city but is also equipped with true technical features. For example, windbreakers are waterproof, jackets and parkas are made in different shapes and thicknesses, each model incorporating details from mountain wear. Seams are reinforced. Outer shells are polyester to be water resistant.
Initially, the new products comprise some twenty items and colors, mostly for men, with sleeved items priced between 130 and 200 euros. These products are also definitely trying to keep up with the latest trends, such as a teddy parka.
Parallel to this big overhaul of collections, Rip Curl has reduced its lifestyle sector. “We still offer a complete line,” said Cantet, “with products such as jeans, sweaters and shirts. But less than before. We do not need to offer 15 jeans.” Cantet explained that “surf brands all went towards lifestyle with strong growth in sales. But at one point, surf was less in and there was a drop off. The surf brands have basically had to deal with powerful brands and leading retailers in the simple fashion product sector.”
It is known that the recession affected the development of Rip Curl’s business in Europe. A restructuring plan was completed this summer that included Rip Curl store closings in cities and shopping centers. Rip Curl now has 300 stores worldwide, either self-owned or in partnership, including fifty in Europe.
However, Rip Curl is not just closing things. The brand has opened 100% technical stores in the southwest of France, at Anglet Beach and Hossegor in a region where Rip Curl already has several conventional stores. Cantet said the result is a strong growth in sales for stores in this geographical area. “A bricks-and-mortar store has a reason to exist despite the growth of digital,” said the Rip Curl CEO. “It must be located primarily near places where the sport is practiced.” He said that the 100% technical concept could also be offered as a partnership.
Rip Curl completed its fiscal year 2011/2012 at the end of June with overall sales of 320 million euros (400 million Australian dollars). Revenue rose 15% compared to the previous year. Rip Curl says that it had double-digit growth on a like-for-like basis in Brazil, North America and South America and South East Asia. In contrast, Europe sharply declined 15% for the year, with revenues at 75 million euros.
Cantet cites the decision to cut back some sales online, especially to not jeopardize the company’s image by running permanent promotional campaigns. But still, the CEO of Rip Curl international reveals that declines mainly came from southern Europe and Britain but that Scandinavian countries, Germany and Central Europe recorded increased business. For the whole of Europe, Cantet sees stable sales for fiscal year 2012/2013. Rip Curl says its restructuring has benefited overall results, even posting a slight increase compared to last year.
Regarding the possible change in ownership for Rip Curl, Olivier Cantet confirmed that discussions were ongoing but no decision has been made. “This may involve an equity investment from a new minority or majority shareholder,” he said. “One thing I’m sure of, Rip Curl should not list on the stock exchange.”
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