By John Stouffer

Several years ago, Airwalk was considered a top snowboard-boot manufacturer that drew heavily from its skateboard heritage to make great strides in the snow business. Today, it has evolved into a full-equipment supplier looking to expand on the idea that it's a snowboard company, not just a boot or youth-oriented footwear brand.

That's a major departure from the company that once supplied almost every pro snowboarder with boots and skate shoes. But in the end, with a growing and mainstreaming snowboard market, Airwalk sees the entire business as vital to its image. And with the resources that its successful footwear business offers to its snowboard program, the management believes it has plenty of room to continue growing and improving in the snowsports market.

With cutting-edge snowboard constructions, TV advertising, and one of the largest pro teams in the business, Airwalk has resources most snowboard brands only dream about. With all this going for it, SNOWboarding Business decided it was time to head out to Boalsburg, Pennsylvania and see just what Airwalk has been up to.

Resources

Centrally located in the Quaker State, Airwalk's offices house 80 employees, including designers, product managers, sales, marketing, and customer service departments. The company also has another office in Altoona, but is slowly moving the people there to the main office.

From the back of the building, one gets a view of Tussey Mountain, a small, East Coast ski resort employees can drive to in a matter of minutes during the snow season to test out product or just ride. In the summer, the surrounding green, wooded hills provide outstanding singletrack mountain biking for employees.

The brick, multi-story office sits just outside of the small town, and a short ride from State College where Penn State University is located.

On the top floor, product category managers sit at one end of the building across from an area where the eight designers are located. The groups come together in a central meeting room to discuss product in a series of three or four roundtables throughout the year. Design director Todd Miller oversees both snowboard boot and footwear lines.

In the design area, there are storage closets and file cabinets with hundreds of samples of shoe and boot soles, fabrics, and snowboard boot outer materials used or developed for the designers to reference at any time.

Marketing, customer service, sales, operations, and other support staff are located on the bottom floor of the building. Six people work in marketing services alone, with another room filled with customer service. Granted, not all these people are working directly on snowboarding, but the company has ample resources to devote to the snow business during the season, without having to hire new people.

The international sales department is in another part of the floor, and is seen as an important growth area, with the company recently hiring all new distributors in Europe. Airwalk is distributed by the athletic footwear-giant Asics in Japan, giving it strength, stability, and strong market penetration in that rocky market.

Airwalk is broken into two divisions: active casual and action sports, with snowboarding falling under the action-sports umbrella. That category does in excess of twenty-million dollars worldwide, and is profitable. However, it's still just a small part of the estimated 200-million dollars in sales the company does each year, but it's viewed as a vital part of the whole.

The two divisions draw from each other in an amiable give-and-take. With the larger active-casual unit as the bread-winner, snowboarding firmly establishes Airwalk's presence in the youth and alternative-sports markets and as a lifestyle brand. Snowboard Category Manager Paul Alden points out that the snowboarding program benefits by utilizing the larger marketing budget to do such things as be the presenting sponsor of Board Aid for the last five years.

Company For Sale

To help manage the growth the company experienced on the heels of its booming mainstream popularity, Airwalk started looking for a potential buyer. After almost a year of talking to many different companies, Airwalk is no longer pursuing that route, says Boot and Apparel Product Manager Cec Annett. With new banking in place, along with new management, the current owner feels confident the management can run the company by themselves.

The new officers include CEO Peter Goehrie and CFO Bob Fischer. Longtime Airwalk manager Lee Smith remains the president.

"Airwalk grew so quickly in the last three years, that things were just out of hand," says Alden. "Now the company has reorganized, and the bottom line is business. We're now focusing on sales and service of sales."

The snowboarding division has also gone through some changes. Veteran Airwalk rep Dan Van Duzor has taken over as the national sales manager for snowboarding. The company has hired a new snowboard team manager, Renee Hansen, to set up photo shoots, team travel, and pros' salaries. To assist with marketing, the company has also hired outside agencies Fuse, to handle the vertical promotions, and Sancor, to do more general-market work.

Team

To get product feedback and design directions, the staff relies heavily on its cadre of pros. "The team is pivotal," says Alden. "Airwalk has the second- largest team budget in the industry."

In addition to the full sponsorships that most of its pros have, Airwalk still has contracts with high-profile riders such as Tina Basich and Todd Richards to ride just its boots. Richards was re-signed this summer to a two- year deal.

The company expects these pros to do more than just endorse its products. "It's not like three or four years ago when team riders felt like they just deserved a check," says Alden. "They have a job to do now. We shipped two boards to Noah [Brandon] and I got back the most intelligently written evaluation about the boards I've ever seen."

With more than fifteen global A-team, more than 30 B-team, and 100 regional riders, the company relies heavily on team feedback to assist with designs, graphics, and overall performance of its products.

According to Alden, he's seeing more initiative from the riders as well. At a recent meeting, a team member asked for a rep list so the rider could set up his own shop demos as he travels around the country. On-snow Commitment

Having the pro input is great, but Airwalk has taken things one step further. Its R&D Manager Joe Babcock is now based at Mt. Hood, Oregon to test and evaluate new product designs and in-production models year-round to make sure they meet specifications during the manufacturing process.

This summer the company hosted a major get-together of its designers and team riders to work on products. By doing this, the company helped give ownership of these products to the different people involved with developing the lines. While retailers won't be able to preview these new products for several months, the Airwalk staff believes it will be offering the most complete and best-ever line of snowboards, boots, bindings, and apparel.

Product Development

It's a long process to finally get those products on-snow just for testing let alone for delivery. The equipment tested on the slopes during the summer was actually imagined the previous winter.

The product managers like Alden and Annett first write up briefs describing the different products, prices, materials, and target audiences the designers should build for. These briefs are produced through a combination of reps', retailers', and team feedback the product managers get throughout the season. The briefs are presented to designers in January, and are turned into advanced concepts (product drawings and designs) in the next month or two.

Often, the product managers will start with as many as 40 different designs, which will be cut down to twenty to 25. Most of these will make it through the first construction phase, but then will be cut out after a round of fit and on- snow testing. By March, the designers and product managers will ask for feedback from retailers.

After several more rounds of testing, retailer feedback, and company roundtables, the product is ready for the sales cycle, then production. Often, designers spend several weeks in China at the company's factories to ensure the sample process is followed and everything is built to specification. The company has substantial pull at these factories because of the volumes its doing now, and even has full-time support staff based there.

The development processes are followed for all of Airwalk's snowboard products, now that the company has become a full-line supplier. And things look like they will continue to expand. Annett says that board models will go from 26 SKUs for the 1998/99 season to 37 or 38 for '99/00. The company's clothing line will also expand by 30 percent.

Servicing Everyone

Airwalk sees itself as a supplier of snowboard products to riders of all ages, not just the same market segment it goes after in footwear•the eight to 22 year old.

"For the long-term position of the brand, being simply a component supplier was not a good idea," says Annett, of the company's desire to expand into boards and other hardgoods. But he also recognizes Airwalk could have done a better.

"We failed to convey the message of who we were and what our products were when we first came out with boards and apparel," he says. "We've also felt the resistance from the industry. Maybe we set our sights a little too high."

With a multi-tier product separation, the company is ready to service any retailer in the marketplace. Its reps are employees of the company and are dedicated to selling only Airwalk products, so it expects better customer service and retailer attention from them.

Snowboard boots are the strongest winter category the company has right now, but other areas are growing. Worldwide, board sales doubled this year and the company has exclusive multi-year deals with board factories to continue innovating products like the super-light, freeriding A-1 board, which utilizes a Kevlar reinforced advanced composite material core instead of wood.

According to Annett, the main philosophy of the company is to market one logo and one brand for whatever product it sells. With strengths like extensive product development, strong marketing, new management, and years of snowboarding experience, the company is poised to grow even bigger in the snowboarding world.

"We developed an excellent brand," says Annett of the company's mainstream marketing, such as its TV ads on MTV, FOX, and the Comedy Network. "Now we have to build an excellent company to support the brand."