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Arbor CEO on Surviving and Thriving for 25 Years

December 9, 2020 | 0 Comments

A talk with Arbor Co-Founder Bob Carlson about the key changes in business strategy that allowed the snowboard and skateboard brand to survive when so many others didn’t.

 By Tiffany Montgomery, Shop-Eat-Surf

Arbor Snowboards launched in 1995 with a commitment to sustainability and craftsmanship at a time when the environment was not a hot topic.

“Sustainability now just seems like an everyday thing, but back then it was not a thing,” said Bob Carlson, who co-founded the brand with a high school buddy, Chris Jensen. “A lot of people didn’t even know what we were talking about. We got called hippies a lot.”

This year, the company, which is also a major player in skateboards, is celebrating its 25th year in business.

In an interview with Shop Eat Surf, Bob said the brand would have never made it this long if it had not made some key tweaks to its business strategy along the way.

Those tweaks include switching to a licensing model which has managed to avoid many of the mistakes that typically happen with licensing. Arbor also empowered and brought in younger employees and others who were more connected to the core of the snowboard market to broaden its appeal during a tumultuous time in the snowboard industry.

We talked to Bob about all that and more, including how Arbor’s business is faring during the pandemic, and what the brand is currently seeing in the snowboard market as winter arrives.

Arbor has a lot going on at the moment, including the release of a documentary about the 25 years of Arbor called “Crossing the Grain” and a new Arbor store in San Diego.

This is a condensed and edited version of our talk. For the full interview, see the video of our conversation.

Was the reaction immediately positive when Arbor came to the market or did it take some time for people to adopt the brand and the sustainability message?

Bob Carlson: It took some time. We launched with the snowboard line and we wouldn’t launch the skateboard line until ’98.

The snowboard marketplace was tremendously saturated. There were as many as 300 snowboard brands when we launched in ’95/’96 and our differentiation really allowed us to cut through.

Initially that differentiation – we were talking about sustainability and wood top sheets and our competitors were talking about graphics and baggy pants and team riders – was really positive for the business.

But, as we moved to the industry consolidation in the late ‘90s it got tricky and we struggled. And, that led to some really important changes that I think led to why we survived 25 years.

Why did it get tricky?

Bob Carlson: The industry consolidated and retailers, which at one point were carrying 20, 25 brands, started carrying five, six, seven brands. We weren’t always making the cut.

People wanted the products that were resonating in the mid-to late ‘90s, and they weren’t willing to take as many chances with outlying ideas.

How challenging did it get?

Bob Carlson: It got very challenging. Growth really slowed for us. Inventory grew, debt grew, paying our bills got really tricky. I had a lot of sleepless nights. And, there was a lot of times where I thought about closing our doors. A lot of people I knew were shutting their brands down.

In 2001, I stepped away from the business and wrote a self-analysis on who we are, what we’re doing right, what we’re doing wrong, and what we needed to change.

Frankly, we needed to get out of the way and bring in some new ideas about how we build bridges to the core of the industry.

That led to what we call the Arbor Collective today, which is a more inclusive, more horizontal approach to product development, team, marketing, storytelling, and management of the business.

When you say you built that bridge to the core of snowboarding, how would you define that core?

Bob Carlson: To me that’s specialty snowboard and skateboard shops and snowboard and skateboard specialty media.

You’ve got to realize Chris and I were hugely dedicated snowboarders. But I had never worked at a snowboard brand or a skateboard brand. I’d never been a rep and frankly I’d never worked in a retail store.

We had to turn the pyramid upside down and elevate the youngest people in our company who are connected most closely to the culture. We had to take on a role where we put the guardrails up for what the brand was and wasn’t and then let a wider group of managers with the influence of artists and athletes color between those lines. And, that process really put Arbor on the track to survive the following 20 years.

CREATING A LICENSING MODEL

Things got better? 

Bob Carlson: Things got better and we started really growing fast. But when I was faced with growth and financing that growth, I was very nervous about going the traditional route.

I had seen so many brands go out of business. Some of those were brands that had partnered with the wrong private equity firms. Some of those brands had not put financing in place. And, when things got tough, unfortunately a lot of them went away.

So we decided to expand upon the collective model and we ended up bringing in global distributors for all three categories of our businesses – skate, snow, and softgoods.

The first partner was Sector 9. I had been making our skateboards at Sector 9 for many years.

The people that worked at Sector 9 were the kind of people I wanted to surround this business with. They fit the collective model. I learned from them. They had a great perspective on the world of skateboarding.

So, we built this strategic partnership with Steve Lake and his team around global distribution. They handled sales, global distribution, production, logistics, finance. We focused on branding, marketing, product development.

It was really about sharing the revenues and responsibilities around the Arbor skateboard division. He made us big and global. We kept it small, nimble, close to skateboarding, and close to our original message. And, it worked. We ended up making one of the most unique operational models in skateboarding.

And, over time with did the same thing with a company called Motion Sports with our snowboard program. And, we also added an apparel partner called Northstar. And, today Arbor is a collective of not just people, but partners who share the trademarks and, again, the responsibilities and revenues that go with it.

The best part about it is that we get to stay small. Here at our headquarters in Venice, we are really close to snowboarding and skateboarding. We get to focus on the things that matter for this brand –  product development, developing the story around sustainability, the efforts around sustainability, and the craft of making snowboards, skateboards, and apparel.

And, at the same time we have these three partners out there in the world working hard to build the global distribution, grow sales, and improve our service. So, again, that big and small balance that makes it such a unique model.

Have there been any downsides to that model?

Bob Carlson: Sharing control with partners is tough. And, I work with a lot of smart, confident individuals who have their own ideas about things. So, I’ve learned along the way to share what Arbor is in a wide range of areas. Obviously, I’m not giving (ground) on sustainability, the ideas of craftsmanship, how we work with artists and athletes.

But on running a business and how you run that business, those responsibilities are shared and that means that I need to have a process of give and take.

Sharing responsibilities and decision-making is not for everybody who starts a business. But I would take this any day over worrying about a banker.

Let’s talk about the pandemic. What have you guys seen business-wise during this period? 

Bob Carlson: My (licensing) partners and I all thought that it was going to be a disaster. On the apparel side, we actually have slowed the business to a crawl. We had a great 2019, but we’re still in that testing phase, so we’ve slowed that business down dramatically.

On the snow and skate side, we were planning to be very conservative. And it’s only because of a few things that happened which allowed us to react to the growth that we saw in hardgoods.

We got through the weird shutdowns of spring, and by summer we were flying on the skate side. The only reason why we were able to adjust was we were midstream in moving from our last skate partner to our new skate partner, Shiner LTD. So we had planned for extra product during the transition. Shiner is really known for a commitment to inventory so that they can service their customers at a high level. That’s how they built their business in Europe.

So, we had opened the floodgates for product for the launch with them. We had three seasons purchased and had secured production and that paid dividends. When we saw the demand in summer, Shiner got us ready for fall and holiday. And, at this point we’ve already sold 65% of what we’ve purchased for Spring ‘21. It’s already been pre-booked.

What about on the snow side?

Bob Carlson: On the snow side, we don’t make our snowboards in China, so we didn’t have a slowdown. We got way out ahead of it. And, the guys at Motion just kept their foot on the gas.

We built enough product that if the lifts stay open, and that’s a big if, we’re going to see 10% to 20% growth this year. And, if fall is any indication with the sell through that we’re seeing and the reorders that we’re seeing, we’re on track to have a great year.

Is the demand more with splitboards or is it across the board? 

Bob Carlson: It’s all kinds of boards. On the snow side, splits are through the roof. I’m really excited to see our growth with splits. We actually went back into production and produced more product.

With splits, it’s going to be interesting. Are we creating new participants that are going to stick with it if the lifts stay open?

I hope so and I really hope that we’re seeing an equal growth in avalanche and safety training and that people are being really smart about their expanded viewpoint on snowboarding.

On the skate side, I think we’ve created a tremendous number of new participants. More women than you’ve ever seen in the sport, people coming back to skating, new customers. The kind of participation we’re seeing for skateboarding is going to pay dividends for a long time to come.

How is Arbor celebrating its 25th year?

 Bob Carlson: We’ve got a full roster. We just released a little new insights and highlights video that sort of kicked off our efforts.

We’re doing some really cool social media stuff. One of them that I’m enjoying is the Founders’ Archives. They asked me to go back, dig through my archives and give people some insights into the early days. So, the Founders’ Archives is available on all of our channels and showing pictures of our first booth, our first product, just where we’ve come from.

And, we just released a documentary on the brand called “Crossing the Grain.” We are interviewing athletes from past and present, management from past and present, some people from the industry. And, telling the story of Arbor, all the ups and downs and what we started to do as sort of the first action sports company founded to focus on sustainability and how that led to this roller coaster ride that has trended up, thank goodness, and the interesting story about how we got here 25 years later.

 You guys really were ahead of your time. 

 Bob Carlson: It wasn’t easy. I think we were stubborn. We believed that this mattered. And we weren’t going to give up on it.

I think it’s the community of snowboarding that really allowed Arbor to thrive. It’s a generation of kids, people, that snowboard and skate and surf today that really recognize that protecting the planet is about protecting the playground that eventually elevated Arbor to where we are today and made this all possible.

And I couldn’t be more thankful to our community for helping us take this early message, fight through some challenges, and end up here at 25 years still focused on that original mission and that original idea.

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