Brothers Neilsen Surf Shop Chain close
Bob Feigel
BROTHERS NEILSEN SHUTTING THEIR DOORS SIGNALS RETAIL CHANGE
Wednesday, 16 July 2008
Paul Neilsen survived many wipeouts, but his Brothers Neilsen surf
shop chain could not ride out a financial tsunami that washed away 37
years of work. 'You could call it the perfect storm,' the former
international surfing champion said of the factors that combined to
sink the multimillion-dollar Queensland business.
"I don't want to comment further about it, except that I'm not blaming
anyone," said the 56-year-old Gold Coast company director. The
collapse of the high-profile retail chain, which entered liquidation
two weeks ago, owing creditors about $10 million, sparked concerns
over the state of the surfing industry.
Was it a sign that a long history of growth was approaching its peak
or that the next wave of big business was moving in? Scores of
Australian surf shops have come and gone since the 1970s, yet in the
early days it was more to do with a dubious business model of shutting
shop when the waves were pumping.
The Neilsens had ridden through recessions and poor seasons in the
past and emerged stronger and wiser. Apart from moulding a successful
business, they had nurtured and sponsored several generations of
national and world surfing champions and financed scores of junior,
open and team contests on the Gold and Sunshine coasts.
They have been an integral part of the sport's Australian history. The
first Brothers Neilsen surf shop opened in Surfers Paradise in 1971,
making less than 30¢ on the sale of a block of surfboard wax on the
first day of business. Paul Neilsen and brothers Rick and Len went on
to build a retail and franchise surf store chain that was barrelling
along with 22 shops Australia-wide in 2002.
Paul had become the figurehead of the company as managing director and
was grooming his sons – Kris, 24, Danny, 19, and Matt 17 – to run the
family business.
Kris worked in the buying department, controlling surfboards and
accessories for the shops; Danny was employed part-time at the Nobby's
Beach store while studying multimedia at Griffith University; and
Matt, a Grade 12 student at Somerset College, competes on the junior
surfing circuit as a sponsored rider for Brothers Neilsen.
Adam, Rick Neilsen's only child, worked in sales and competes as a
Burleigh Boardriders ace. But a continuation of the family dynasty was
not to be. When liquidator John Greig, of Deloitte Brisbane, announced
the end of an era a fortnight ago, Brothers Neilsen had 10 stores
listed in the White Pages.
According to an industry insider and former shop owner, vertical
integration (control from manufacture to retail) by leading surf
brands such as Quiksilver, Billabong and Rip Curl is "putting the
squeeze" on smaller independent operators. The Big 3 Australian-bred
firms started in the late 1960s and early '70s making boardshorts or
wetsuits.
Today they offer everything that can be worn from head to toe, in the
sea and on land, and in the past decade they have opened their own
stores around the world. "It's hard to survive when you are competing
with your main suppliers," the insider said. "People vote with their
hip pocket and they'll go to the shop where the shoes are a dollar
cheaper. The culture of surfing has died and there's no loyalty to a
particular family company in the eyes of Generation Y."
The "Rip-Bill-Quik" trio pours millions of dollars back into the sport
by financing the biggest and best contests of the world championships.
They sponsor superstars such as the US's eight-time world champion
Kelly Slater, reigning world champion Mick Fanning and fellow Gold
Coaster Joel Parkinson.
Veteran Gold Coast surfboard shaper Murray Bourton has watched the
industry grow from backyard to boardroom since 1970. He said he was
glad that he joined a group of leading Australian shapers to form
their BASE super-factory on the Gold Coast five years ago. He could
"see the headlights coming over the hill" for smaller surfing
retailers.
"The majors are going vertical and that must hurt because they can
afford prime locations," Mr Bourton said. "People like to shop in
those big icon stores. Surf retail is way too competitive, like there
are surf shops in Alice Springs, two or three in Darwin and about six
in Cairns. "The people who seem to buy surf shops now are the same
people who buy pharmacies and newsagencies.
"I think there is no more growth in it. They are eyeing off Asia and
waiting for India to have 20 per cent of their people middle-class or
even China have 5 per cent of their population middle-class.
"The growth in all Western countries has pretty well filled up and now
they're all fighting over a chip like a seagull on Duranbah hill." Mr
Bourton, 57, said selling surfboards had never been as profitable as
clothing and accessories yet he believed it carried fewer risks as a
business.
He realised his market was not big and he and his partners "worked
within our means". "If everyone went broke tomorrow they'd sit on the
beach with time on their hands and, by hook or by crook, they'd go
surfing. "Once they've got a board it doesn't cost them anything to
catch a wave."
The corporate march would not stop new young shapers picking up a
planer and making their own surfboards, he said. "Surfboards are a
cottage industry. You can make them in your garage or under your
house," Mr Bourton said. "Now you can get them machined without
messing up your garage, and send them off to a sub-contract glassing
factory."
--
"It's not that I'm afraid to die. I just don't want to be there when it happens." - Woody Allen
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