Big Waves, Small Profits : Surf Industry Beached in Flood of Board Makers

Most of the customers who wander into Pasha Market & Liquor in Huntington Beach buy beer, cereal, candy or magazines. But in recent months, some have come out of the corner market lugging surfboards.

Just a few years ago, such a retailing event would have been as unlikely as a bakery selling lawn mowers.

But the surfboard industry is undergoing its most profound change since the days when Frankie Avalon and Annette Funicello pretended to surf in a series of beach movies in the 1960s that gave the sport worldwide exposure.

An industry that at best is marginally profitable has become fragmented, increasingly competitive and is facing the first trickle of lower-priced imports.

Because there is no trade association, it is difficult to track changes in the surfboard industry. But Orange County unquestionably remains the hub of the industry. A plethora of board makers and surf shops call the county home--as do both major surfing magazines and the company that is the undisputed world leader of surfboard blank (the polyurethane core of a board) production--Clark Foam Products of South Laguna.

Steve Pezman, publisher of San Juan Capistrano-based Surfer magazine, estimates that of the 80,000 to 100,000 surfboards sold each year in the United States, half are sold and most are made in California.

In the 1960s, the glory days of surfing, a dozen surfboard makers dominated the industry. Today, only a few of the pioneer companies survive--most notably Hobie Surfboards in San Juan Capistrano and Gordie’s Surfboards in Huntington Beach. Scores of smaller companies elbowing into the business have reduced the older companies’ market share to a fraction of what it was two decades ago.

Back Where It Started

“It’s back where it all started . . . in the garages,” said Hobie Alter, developer of the modern polyurethane surfboard and owner of a business empire that makes and markets surfboards, sports clothing and boats.

At any given beach, “you will see 15 different surfboard labels in a minute,” said Dean Johnson, a salesman for Bruce Jones Surfboards in Sunset Beach.

“Bigness is way smaller than it used to be,” said Steve Boehne, owner of Infinity Inc., a Laguna Niguel surfboard maker that produces about 1,200 boards a year.

For example, Hobie has seen its sales volume fall to about 1,200 boards a year from a high of about 6,000 boards annually in the mid-1960s.

Like other surfboard retailers, Hobie shops have evolved into “life style” stores, selling clothing, ski equipment and skateboards in addition to surfboards.

Surfing Shrine

Two decades ago, a surfboard shop was a cross between a surfing shrine and small warehouse. Beside dozens of new and used boards, a well-equipped shop of yesteryear might have offered car-top surfboard racks and maybe a few swim trunks and T-shirts. The primary accessory sold in the shops was paraffin--cakes of sticky wax rubbed onto the deck of the board to improve the rider’s footing.

Now, surfboards are simply one of the items sold in surf shops--and often are not the primary item on display.

There is little profit in surfboards because retail prices for the name brands have always been kept low by competition from the neighborhood surfboard makers--usually locally renowned surfers who use their garages to turn out boards for friends and fans.

And companies like Costa Mesa-based Crystaliner Corp. provide a growing do-it-yourself market with all of the materials needed to finish a foam surfboard blank.

“There are so many backyard makers out there it’s insane,” said Gordie Duane, whose surfboard shop has been a fixture on Pacific Coast Highway in Huntington Beach since 1955.

Surfboards are a loss leader in Hobie shops, said Dick Metz, president of Alter’s retail operation, Hobie Sports, which owns five surfboard and clothing shops in Orange County and five more in Hawaii. The company’s new Dana Point store devotes only a very small amount of space to surfboards, with most of the approximately 4,000 square feet given over to casual clothing and ski equipment.

“Hobie never made any money in the surfboards; it came from the clothing,” Metz said.

Most of the other big name surfboards that were the backbone of the industry in California in the 1960s have gone the way of the Nash Metropolitan and Nehru jackets--no one makes them anymore but there are still a few old ones around.

Each Locale Has a Guru

In their place have come boards made by scores of smaller companies whose market area often does not extend beyond a particular beach--or even a small sector of a beach. “Each locale has (its) own guru,” said Franklin Pierce, owner of Impulse Products, a Santa Ana company that finishes and retails surfboards under its own label.

Take Randy Schleigh for example.

Operating from the back of Herbie Fletcher’s surf shop in San Clemente, Schleigh reckons that he shapes and finishes about 1,000 boards a year--almost as many as Hobie Surfboards turns out. A few pro surfers ride his boards, Schleigh says, but his largest market is among those who surf the area near the Ritz-Carlton in Laguna Niguel.

Schleigh, whose boards retail for $290 to $320, learned his shaping skills by “hanging out at surf shops.” He began shaping--hand finishing a blank to a customized length and contour--as a hobby a decade ago. Over the years the hobby turned into a business that keeps him occupied from May to October. In the winter, Schleigh turns into an electrician.

But neither Schleigh nor Hobie Sports can compete in price with the boards that are beginning to flow into the United States from Mexico and Taiwan, countries with labor costs far lower than those in the United States.

Done by Hand

Despite the advances in foams and fiberglass that have steadily trimmed the weight from surfboards, final shaping of each foam blank must still be done by hand. The application of each board’s fiberglass coat also is a process done by hand.

And that gives the Korean and Mexican boards a cost advantage.

For example, Jack’s Surf & Sport, a fixture in Huntington Beach for 20 years, stocks Atunas surfboards, made in Taiwan. The Atunas board carries a price tag about $50 less than comparable boards that are made by area companies and typically retail for about $300.

Pasha Market & Liquor, just a few blocks down Pacific Coast Highway from Jack’s, is selling $199 San Miguel surfboards made in Ensenada, Mexico.

As might be expected, the old board-building fraternity, the “Dana Point Mafia,” frowns on the Mexican and Oriental imports.

“The Taiwanese are getting into it in a big way,” said an employee of Gordie’s Surfboards, who asked to remain anonymous. But the Oriental boards do not have the same “quality of workmanship,” he asserted. “Ride them once and you won’t want to ride them again.”

Others More Cautious

Others are more cautious in their criticisms, recalling the lack of concern the American auto industry had for Japanese imports in the 1960s.

“They are behind in craftsmanship and quality,” Schleigh said. “But they are catching on real quick.”

Surfboards today use basically the same fiberglass and polyurethane technology and construction developed by Alter in 1958. Hobie’s dense foam-cored boards ended the era of the balsa wood surfboard, which in the 1940s replaced the heavy redwood boards that had been in use since the 1920s.

And the polyurethane foam business is a tale in itself.

On every continent but Australia, virtually all of the foam blanks used in surfboard construction are manufactured by Clark Foam Products, a South Laguna company that has resisted competitors and skillfully maintained its position as the biggest and most efficient producer of blanks by guarding its processes with military secrecy.

No Competition

Clark Foam so completely dominates the industry that owner Gordon Clark is able to tend to business most of the time from his house--in Hawaii. Clark, who also has a house in Capistrano Beach, bought Alter’s foam business in 1961. The process for most boards begins at Clark Foam, where approximately 80 employees keep the factory running around the clock, churning out as many as 1,000 surfboard blanks a day. The blanks wholesale for between $25 to $50. In peak periods in the spring, the factory operates seven days a week. Clark declined to discuss its annual production or financial figures.

Bucket of Polyurethane

A surfboard starts life as a bucket of liquid polyurethane, which is poured into a pressure mold where a chemical reaction “cooks” it for about 30 minutes until it solidifies. Each blank then is cut in half lengthwise, fitted with a wooden stringer to give it strength and glued back together. The blanks then are ready for shipment to glassing shops and retailers around the world--where shapers shave and sand them to the precise contours they are seeking, fit the fins that give the boards ready maneuverability and then coat them with fiberglass cloth and resin.

Numerous attempts to build surfboards out of other substances have failed to achieve the continuing commercial success of polyurethane and fiberglass.

Lighter and Stronger

The trend in surfboards is to progressively lighter and stronger polyurethane foams, and the variety of shapes and sizes has increased dramatically since surfing’s big growth burst in the 1960s. “We used to have four basic shapes,” said Dick Morales, Clark’s plant manager. “Now we have 60 shapes and growing.”

The difficulty of any one surfboard shop stocking so many styles and shapes has further fragmented the industry, which initially was fractured during the surfing recession in the 1970s when the big companies either broke up or reduced their operations, laying off shapers who then started their own companies and carved out neighborhood business niches for themselves.

The industry now caters to two distinct groups--older surfers who tend to favor longer boards, and younger surfers who buy the shorter boards that have as many as five fins on the bottom for greater maneuverability.

Surf shop owners say former surfers frequently will come in with their sons and end up buying a short board for the youth and long board for themselves. Bob Kizanis, owner of RGK Water Contact Equipment in Costa Mesa, said these surfer-fathers often ask: “Do you think I’m too old to surf?”

Premium on Fun

Surfer-businessmen still put a premium on having fun and perhaps no one personifies the life style better than Hobie Sports’ president Metz.

Metz says he does not own a single pair of dress shoes, preferring instead to pad around his office and stores in shorts, thongs and a flowered shirt. “We were never motivated by money,” he said. “It was ‘how can we survive and not go to work.”’

Metz sometimes went to extraordinary lengths to avoid work.

As owner of a liquor store on Pacific Coast Highway in Huntington Beach in the mid-1950s, Metz generally went surfing every day, leaving operation of the store to a sales clerk who was instructed to run up a flag when a distributor came by. This was a signal to Metz to paddle over to the pier, where he sat on his bobbing surfboard and discussed business with the distributor--who was obliged to lean over the rail and shout to make himself heard.

Not surprisingly, the store failed. But an unfazed Metz took the $1,000 left after the sale of the store’s assets, added $1,200 he raised from the sale of his 1950 Ford convertible and his four-inch screen Hoffman Easy-Vision television set, and set off on a surf trip around the world.

He came back three years later and, in 1961, teamed up with Alter.

Company Thrived

With the merging of Alter’s inventive mind and Metz’s knack for retailing, the company has thrived from its beginning. Today, in addition to the two stores in Dana Point, Hobie has two shops in Laguna Beach, one in El Toro called Beach Co. and five more shops in Hawaii. An additional 500 stores are licensed to sell Hobie products, including catamarans and single-hull sailboats.

But in Hobie’s newest store in Dana Point is a surf museum that serves as a reminder that the whole empire began with surfboards.