Core retailers have been through a wild ride this year.
The panic that came with the spring lockdowns. The unexpected surge in business that erupted in the summer. The scramble for more inventory.
We touched base with several retailers we spoke to earlier this summer to see how 2020 ended up turning out for them.
Given the destruction that the pandemic has caused in some areas of the economy, the core retail channel is an absolute bright spot, which bodes well for the industry going forward.
However, the good times are not happening for everyone in the industry. Many stores that rely on fly-in visitors and destination tourists have had a tougher time.
Cheyne Cottrell, who owns Island Water Sports in Deerfield Beach, Florida with his sisters Karly and Linsey
How did the year end up turning out overall?
Cheyne Cottrell: It has been amazing, We’ve never worked so hard in our lives, but we were blessed to do so.
It’s going to end up as our best year ever. Not only financially, but our team is working better together than ever, and our relationships with key partners has really improved from working through some of the year’s challenges.
What was the biggest surprise?
Cheyne Cottrell: No. 1, our team. They just made it happen whenever a curveball was thrown, and there were A LOT!
No. 2 is just how many people have moved to Florida. It seems like every person I speak to “just moved from the city.”
What is your biggest challenge right now?
Cheyne Cottrell: Staffing is the biggest challenge. We need to hire a few key people, and it’s hard to find people that want to work, let alone who are qualified. When they say the unemployment is 15% I don’t know where these people are hiding.
The second biggest challenge is getting product. The supply chain in hardgoods is a real struggle. Some clothing is hard to get a hold of, but that’s been easier to navigate thanks to help from a few key reps.
How are you feeling about 2021?
Cheyne Cottrell: I feel really good! Inventory is looking more promising and being located in South Florida will be a major plus for us.
We completely missed spring last year, which historically has been our biggest season. I think we’ll get people that cancelled vacations in 2020. Traveling internationally is a headache with testing and restrictions, plus our governor pretty much guaranteed there wouldn’t be another shutdown in Florida. So I think we’ll get a lot of tourists that would have historically gone elsewhere. Then you add in the next stimulus and then the vaccine that is giving people more confidence to get moving again.
So I think the good times are going to continue at least through the spring and into summer.
However, I’m pretty cautious looking into fall and holiday next year. Unless every business gets back up and running at pre-COVID levels, unemployment is going to be a serious issue for the larger economy. Restaurants, for example, are getting absolutely crushed. Local regulations here only allow 50% seating here, but it’s even worse in other part of the country.
Restaurants are a huge part of the workforce and our economy, and at some point that’s going to impact all of us.
Duke Edukas, Co-Owner, Surfside Sports, Costa Mesa, Calif.
How did the year end up turning out overall?
Duke Edukas: Looking good so far. We still have several days left in December though. It could be looking great!!!
What was the biggest surprise?
Duke Edukas: How customers descended upon us in such huge numbers.
What is your biggest challenge right now?
Duke Edukas: The constant worry that we may have a COVID outbreak in our staff. So far we haven’t – we’ve been very lucky.
How are you feeling about 2021?
Duke Edukas: Very optimistic. However, If ski resorts close down that could hurt us dramatically.
Josh Hansen, Co-Owner, Hansen Surfboards, Encinitas, Calif.
How did the year end up turning out overall?
Josh Hansen: It was as good as we could have hoped for. Our fiscal year ended Sept. 30, and our 12-month numbers were down, but by less than 5%, which we are happy about considering the lockdowns in the spring.
The first two months of this fiscal year we are seeing sales surge up double digits again. December has been very solid, but we have some really big comps coming up over the next several days.
What was the biggest surprise?
Josh Hansen: Just how busy we have been especially since we are only letting in 40 customers at a time.
What is your biggest challenge right now?
Josh Hansen: Getting products is challenging. We could use a lot more wetsuits, but they are hard to come by. Surfboard inventory is also way down and it’s hard to get inventory.
How are you feeling about 2021?
Josh Hansen: I think 2021 will be good and especially when we go up against the comps when we were closed – Ha ha ha. I anticipate things normalizing in ‘21 and so the second half of the year probably will not be as good and we think – flat to modest growth is probably in the cards.
We believe traveling and other things will happen again and so disposable income may go to other places next year. Even if this happens we have many new surfers and beach lovers so everything will be good either way.
Kim Ball, owner, Hi-Tech Surf Sports in Maui
How did the year end up turning out overall?
Kim Ball: We’re current with all of our vendors and kept everyone employed. We’re blessed beyond belief.
What was the biggest surprise?
Kim Ball: We found out that we don’t need tourists to stay in business. The locals have really supported a “locally owned” surf shop. Da Kitchen closed down, which is probably the most popular plate lunch restaurant on Maui. They were two doors down from our flagship store and involved with our annual longboard contest.
They probably did 1,000 to 1,100 orders a day. We received a lot of residual business from them, but even without Da Kitchen, we still survived.
What is your biggest challenge right now?
Kim Ball: The biggest challenge immediately is getting restocked. We are at our lowest inventory level in over 20 years!
Long term, the challenge is jump-starting the visitor industry in Hawaii. We have a lot of friends who are still out of work, and we have close family who work for the Department of Education that are going to incur a mandatory pay cut like all other state employees.
How are you feeling about 2021?
Kim Ball: We are totally optimistic about 2021! I can’t wait to stop wearing a mask and see customers’ faces instead of trying to figure out who someone is by their eyes and foreheads.
LG Shaw, WRV, Virginia Beach, Outer Banks and Puerto Rico
How did the year end up turning out overall?
LG Shaw: I hesitate to fully disclose. Let’s just say it’s been a very good year.
What was the biggest surprise?
LG Shaw: We stayed bullish throughout the early parts of the shutdown on our forecasts – we were unsure but optimistic. We saw the writing on the wall early for hardgoods picking up but we didn’t expect it to reach the growth levels it did. We are very lucky to have the long standing relationships we do with so many vendors and distributors. It paid us back 10 fold during these trying times.
We were also surprised by the rebound and then then gains that the clothing side of retail had as we headed into the back half of the year.
What is your biggest challenge right now?
LG Shaw: The supply chain uncertainty. We haven’t seen the end of the domino effects of COVID. We are now backed up into the macro level of raw material supply chains being effected.
We have shifted our promotion/sales tactics almost 100% due to lack of inventory availability. Never in a million years did we think our retail holiday “sales” campaign would be sans discounts. It’s basically – “we got what you want, you’re welcome, who loves ya?!”
How are you feeling about 2021?
LG Shaw: Optimistic. COVID regulations and precautions of some kind are going to hover for another 12 to 24 months it would seem, even with vaccine roll outs. This should continue to benefit our industry due to the fact our core customers and new customers should continue to experience additional free time without the burdens of daily commuting or overloaded calendars.
We of course have so much sympathy for all of those who are not on the right side of the tide line for this pandemic! So many folks have lost businesses and/or loved ones. It’s hard to talk about all of the positives we have experienced this year while we know others are suffering.
Luke Mesanko, owner, Wanderlust Land & Sea, Sea Girt, New Jersey
How did the year end up turning out overall?
Luke Mesanko: It is safe to say at this point that this will end up being our best holiday ever by a substantial figure.
Our flagship store has actually produced a banner year as well, by some pretty surprising numbers.
Our seasonal location definitely took a beating because it’s so reliant on entertainment and restaurants. I’m not really concerned as long as things get back to some level of normalcy for next year.
What is your biggest challenge right now?
Luke Mesanko: The biggest challenge for the upcoming year will be managing our buys – especially for spring break, if there is one. I’m still coming up with my forecast of what I think spring/summer/fall will look like.
How are you feeling about 2021?
Luke Mesanko: Overall, I think it should be a great year once COVID restrictions are lifted – fingers crossed.
Lee Elliott, who owns BuyWake.com with his brother, Eric. BuyWake is headquartered in Georgia.
How did the year end up turning out overall?
Lee Elliott: 2020 ended on a really solid note for BuyWake. We continued to enjoy record sales, even while experiencing pretty significant inventory shortages. There was still a bunch of pent up demand this fall and holiday season. In most years, sales for wakeboard and waterski products wane a bit in the fall while the brands are simultaneously debuting the next season’s gear.
This year, the product has been late to market while demand hasn’t receded in the least. So, we have a little feeding frenzy at the moment that has been nice for revenue.
We learned a lot during the big e-commerce retail boom over the summer. It exposed the holes in our game. We learned that high volume and huge revenue increases don’t necessarily translate directly into windfall gains. We’ve been working hard to apply what we learned to build on our successes in 2020 for a more profitable 2021.
What was the biggest surprise?
Lee Elliott: The biggest surprises came in March when we all thought we were going out of business and then in May when we quickly realized this would be one of the most epic seasons on record.
What is your biggest challenge right now?
Lee Elliott: Shipping costs. FedEx has been charging peak pricing since March 2020 and it has really taken a chunk out of our bottom line. We are definitely working on ways to optimize the way we handle inventory and deliver it to our customers.
Another challenge we’re facing right now is in the digital advertising space. Digital ad inventory was unbelievably cheap at the onset of the pandemic. It started to get more expensive during the summer when brands realized we were in the middle of a period of rapid escalation. Ad costs continued to go up through the fall because of all of the political ads towards the end of the election cycle.
Then, things got ultra-competitive during the holiday selling push. All that means achieving solid return on ad spending is definitely a challenge right now.
How are you feeling about 2021?
Lee Elliott: We are really optimistic as a whole for 2021. Watersports seem to have a whole new energy, a new customer base, and a new generation of riders. Everyone who has ever been on a wakeboard knows how incredibly enjoyable and addicting it is. So, we are confident that this upward trend will continue.
My only hesitation is that some retailers might have a false sense of what 2020 actually was, causing them to order way too much product for 2021. The manufacturers need to be smart and not over-produce based on everyone’s possible overreaction to the 2020 wake season. Flooding the market with product in 2021 could disrupt the increased demand we are all currently experiencing as an industry.
