A unique Manly Surf Shop falls victim to floundering times
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Heritage Surf's founder:
Chris Moss |
Things are tough across the board in surf retail right around Australia and Surf Shops have not been spared. After a long slow Winter, Summer can't come soon enough for some. This week Manly’s well known Heritage Surf Shop, announced that it will shutter its doors on October 12th, 2011 and cease trading.
Owner Chris Moss said that due to increased competition and brittle economic times, the store was under performing and was only marginally cash flow positive. Our forecast, he said, indicates slow to negative improvement in all our market segments, so therefore we'll be taking down our shingle. He stressed that this was not a bankruptcy – but rather sliding out gracefully with a soft exit. All our creditors will be paid he confirmed.
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Classic wood not chrome.
A corner Surf Shop in the older,
more traditional motif. |
A finger count of Surf Shops in the greater Manly area will fill more than two hands. With fourteen Surf Shops in one major beach location, the economic pie can only be divided up so far.
Heritage built its strength by offering a unique selection of smaller to medium brands. Choosing not to carry the major surf brands but supporting the likes of
Patagonia,
Toes on the Nose,
Okanuis, Deus,
Critical Slide Society.
Closing the store is the action that will be taken to optimize their current buoyant financial position. Current sales cannot support the assortments and staffing that the company believes the store should be offering.
Across the surfing market, sales at stores that have been open for at least one year, or same-store sales, are considered a key gauge of a retailer’s health. Many Surf Shops are reporting same-store sales for domestic locations falling for several of the last fiscal years. The ranges vary from location to location.
A lot of Surf Shops have not produced top-line growth for several consecutive seasons according to an analyst report released last month. [Top line is a term used by the industry to refer to revenue.]
Many shops are also cutting prices to chase sales, but this tactic is usually unable to translate into positive sales revenue growth.
CommSec economist Savanth Sebastian said although $265 billion passed through the nation's cash registers in the past financial year, it was the weakest annual growth in 50 years.
"The Aussie consumer is certainly depressed. The latest figures show that consumers are still unwilling to spend despite cheaper prices. It highlights how tough business has found the past year," he said.
The effect of weak retail sales is profound. It can lead to a build-up of inventory, a profit killer for retailers, and curbs their appetite to place orders, which is a killer for suppliers. For listed companies, the effect is falling share prices, tighter margins and negative investor sentiment, and for those unlucky enough to be renegotiating debt - good luck.
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Finally; Google Earth will now have to update their Street View
image of the Heritage Surf Shop corner that has been
a fixture in Manly for the past 5 years.
*This image taken from Google Earth. |
For the next month Heritage Surf will be clearing out their stocks with a
Grand Closing Down sale. Clothes, boards, wetsuits, posters and Sydney's best and widest selection of surf books and DVDs are all being marked down to go.
If you are missing something for the collection - here's the opportunity to fill the gap at a closeout price.
Check their
website and Heritage Surf are located at 24 Darley Road, Manly - go grab yourself a bargain. You've got until October 12th!
