Spanish Market Insight

SPAIN

UK FRANCE GERMANY ITALY SWISS PORTUGAL Boardsports remain popular. Consumers are saving some leisure budget for gear. With careful stock management, stores should come out of the current uncertain times unscathed.

Spain’s economic outlook for 2022 is not bad. Personal debt, a good indicator in crises, remains historically low. This is thanks to the recuperation in employment. However, the IMF foresees an abrupt slow-down of Spain’s economy in 2023. EU funds will stimulate activity, but the energy crisis will weigh heavily on GDP growth. Nevertheless, Spain, less exposed to Russian gas, will grow more than neighbouring EU countries.

Sales in the boardsports industry have slowed down but remain good enough. The main reason could be that consumers are well equipped and there is less need for kit. “After two years of unusual sales, some stabilisation was expected”, says Milo Castelo from Mission Surf Shop in Pontevedra. The reopening of nightlife and cultural events has reclaimed some selfcare budgets too. People still seem to have money in their pockets, but one should not underestimate the generalised uncertainty about the economy, which drives people to spend less.

Autumn sales reports are encouraging. Winter product has landed in snowboarding stores, and eager snowboarders are responding well. Last snowboarding season was one of the best in history. People took to the mountain with all the keenness bottled up over a missing season. Shops had bought cautiously due to the unsold stock they had from lockdown. “People were so eager to get back to the mountain, that we sold all our stock. If we had had more, we would have sold more”, says Rafa Sanchez from Back in Black in Madrid. Good swells are encouraging sales of surfboards, and when temperatures drop to normal Autumn levels, wetsuits will follow.

The overall results for 2022 are a bit uncertain, though. Stock scarcity last year persuaded stores to buy largely for their SS22 campaign, counting on the same level of demand. However, the unexpected war and the consequent price increases and uncertainty have slowed down sales. “Some FW21/22 product were delivered at the same time as SS22. This could result in excessive stock”, explains Dani Garcia, sales agent and founder of Special Surf shop and school. Hardware remains the best-selling category. Shoes sales remain stable. Sales of textiles, however, are dropping. Online businesses have benefited from the validation they received during lockdown. They are still far from the sales figures of brick-and-mortar spaces, but their growth has remained steady. “The current lifestyle drives people to buy more from home, out of opening hours”, explains Milo. Schools have many clients, although both Milo and Dani complain about the obstacles they face from government institutions. Far from stimulating this part of the business, they apply high taxation that eats into their profits. Schools are a good indicator of the popularity and growth of a sport. They secure new fans that will buy gear and hotel rooms to spend time in their favourite spots. It would be worth to protect and stimulate their activity.

Boardsports in Spain remain popular and people are keen to invest in gear. The immediate concern is to manage the bull whip effect of the optimistic orders placed last summer. Some brands have reduced their SKUs and added more carry-overs to their collections as a response. Trans-seasonality is a good solution, and it promotes sustainability. Brands and retailers are working together to navigate this new world order. Flexibility is key. Shops are ordering much more in advance, knowing that brands will allow amendments later, if needed. However, the biggest form of support is a long shelf life for products. End of season discounts and in-season online offers are hard obstacles to overcome. The model adopted from big textile corporations does not work in our highly specialised industry. “Growth is guaranteeing a future to the brand and investing in the boardsports community. This is perfectly compatible with making a profit”, says Dani García.

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