Surf Industry Riding Out the Economic Storm

Findings of SIMA's Retail Research Show Resiliency of the Surf/Skate Industry

ALISO VIEJO, Calif., July 13 /PRNewswire-USNewswire/ -- The surf/skate
industry is showing notable resiliency during recent global economic
challenges, posting U.S. retail sales of $7.22 billion in 2008 according to
the Surf Industry Manufacturers Association (SIMA). In a third-party research
study conducted by the Leisure Trends Group (LTG) and commissioned by SIMA,
the 2008 SIMA Retail Distribution Study, findings released today indicate that
the surf industry is holding strong.

The study indicates that the surf industry experienced a slight dip in 2008
with retail sales hitting the $7.22 billion mark compared to $7.48 billion in
2006 (a 3.5% decrease). Softness was most apparent in the fourth quarter of
2008, coinciding with the global economic indicators of that time. However,
the surf industry has shown substantial growth of 10% for the last five years.
The SIMA Retail Distribution Study is conducted biannually, and launched in
2004 with findings showing U.S. surf/skate retail sales at $6.52 billion at
that time.

"While the surf/skate retail industry is not immune to the downward pressure
on retail sales nationwide caused by the global recession, the resiliency of
the surf/skate industry is very positive and promising," says Doug Palladini,
SIMA President and Vice President of Marketing for Vans. "Powerful brands with
close connections to their consumers will see us through these challenging
times and put us in a strong position as the overall economy rebounds."

The 2008 SIMA Retail Distribution Study cites several key factors as driving
the overall consistency of the surf industry, including: loyalty of core
surfers and skaters to the lifestyle and sport; and, the increasing demand for
surf/skate footwear and accessories as evidenced by the double-digit growth of
these key categories.

Passion and youth largely drive the surf industry. Surfers and skaters view
the industry as a lifestyle, not a passing trend. Because of this, core
retailers often tend to feel the downward pressure of sales in tough economic
time less than the larger retailers and chains as the core retailers attract
enthusiasts. While large-scale retailers may attract customers seeking
mainstream fashion trends, when times get tough, those customers often are not
loyal. For core surfers and skaters their sport is a necessity and, while they
might not be spending as much, they keep frequenting their surf and skate
shops looking to fill-in on items such as accessories and replacing old or
worn-out items. According to LTG, experience shows that sports industries are
some of the first to recover from negative global events and previous
recessions.

"There is evidence that the industry has underlying support from core surfers
and skaters," says Sean Smith, Executive Director of SIMA. "Because passion
drives us more than money, our industry is more likely to weather economic
storms. Even when times are tough we're still going to surf, and we're likely
to purchase the attire and equipment needed for us or our kids to pursue this
passion. That's not to say that the past year hasn't been challenging as it
has been for our industry and others, but this data shows we can be confident
the future looks bright."

The foot is responsible for the largest double-digit growth noted in the 2008
SIMA Retail Distribution Study. The total footwear category (men's and women's
shoes and sandals) experienced a hike of 15.6% since 2006 to $1.5 billion in
sales recorded in 2008. While men's footwear and sandals contribute most to
this category claiming 77% of sales ($1.15 billion), women's sandals saw a
significant 3% increase in their contribution to the category during the last
two years, growing from $143 million in sales in 2006 to $210 million in 2008.

"Shoes have moved to the center of the teen wardrobe, with classic and skate
styles setting the pace in youth fashion trends," says Palladini.

The accessory category experienced the second-highest increase, climbing 13.1%
over 2006 to a total of $561 million sold in 2008. Sunglasses and hats led the
charge in increased sales, with duffel bags and watches also contributing
strongly to the category's 2008 success. Of note, sunglass sales have been
trending significantly upwards during the last five years, growing from $81
million in sales in 2004 to $151.5 million in 2008.

"Depth and breadth in accessory assortments have moved the category from
'impulse' to 'must-have,'" states Palladini. "The quality of design and
production in areas such as hats and sunglasses among action sports brands has
increased exponentially in the past decade."

Apparel (which includes men's and women's clothing, swimwear and boardshorts)
has held strong as the largest category, generating the most sales overall
with $1.7 billion (down just 0.8% from 2006). Men's/boy's apparel accounts for
62% of these sales ($1.0 billion). Men's boardshorts also continue to see
growth, increasing to $204 million in 2008 sales, up from $124 million in
2004. Women's swimwear recorded significant growth as well, increasing sales
by $34 million during the last two years to hit $85 million in 2008.

Top Surf Industry Trends
1. Footwear: The overall footwear category (men's and women's
shoes and sandals) experienced the most growth in 2008 with sales of
$1.5
billion - an increase of 15.6% from 2006.
2. Accessories: Continue to see strong growth in this high-margin product
category, which includes sunglasses, watches, bags, hats, belts and
wallets. Accessory sales grew 13.1% from 2006 with total sales of $561
million. Sunglasses, hats and wallets saw a gain in their contribution
to
the overall category.
3. Apparel: This product category generated the most sales with $1.7
billion
(down just 0.8% from 2006), with men's/boy's apparel accounting
for 62% of these sales. Men's boardshorts and women's swimwear
have continued to see growth as well.
4. Wetsuits: Fullsuits continue to drive wetsuit sales. For the first
time,
the study indicates the average retail price for wetsuits is $214, with
82 as the average number of units sold per year in a surf shop.

5. Hard Goods: Skateboard decks are the highest volume seller with 821
units
sold being average for a retailer. Surfboard fins are the least
expensive
hard good, averaging $52 and 507 units sold. Also, in surfboard sales,
the percentage of hybrid boards (fish/eggs/funboards) significantly
increased in 2008 compared to 2006.

About SIMA
The Surf Industry Manufacturers Association (SIMA) is the official working
trade association of more than 300 surf industry suppliers. Founded in 1989,
SIMA is a non-profit organization that serves to promote awareness of the surf
industry and participation in the sport of surfing through public relations
efforts and a variety of services, educational programs and research. In
addition, SIMA actively supports oceanic environmental efforts through its
501(c)(3) charitable environmental foundation, the SIMA Environmental Fund. In
the past 19 years, SIMA's Environmental Fund has raised more than $4.5 million
for the environmental groups seeking to protect the world's oceans, beaches
and waves. The SIMA Humanitarian Fund, also a 501(c)(3) charitable foundation,
was established in 2006 to award grants to various surf or boardsport related
social and humanitarian non-profit organizations whose efforts are focused on
improving the quality of life, health and/or welfare of people. Please visit
www.sima.com for more information.

For more information on SIMA, please go to www.sima.com.

Data for the 2008 SIMA Retail Distribution Study is provided by the Leisure
Trends Group, Boulder, Colorado.

(Graphs, photos and interviews available upon request.)

SOURCE Surf Industry Manufacturers Association (SIMA)

Mandy Johnson, Communications Coordinator, +1-949-366-1164 X7, mandy@sima.com;
or Jennifer Kelly, Associate Director, +1-949-366-1164 X5, jennifer@sima.com,
both of the Surf Industry Manufacturers Association (SIMA)