United they stood, united they fell. Eight years after BASE began, the collective of big name board manufacturers has collapsed leaving huge debts and approximately 35 employees out of work.

The surfboard manufacturing industry has been struggling in recent years and many smaller operators have silently gone under. BASE however, included Darren Handley, Simon Anderson and Murray Bourton - three of Australia's most successful shapers - and was conceived as a new business model for the industry. The gravity of the failure can't be ignored.

The original impetus for BASE was to counter cheap imports by combining the purchasing power, manufacturing space and distribution costs of individual shapers. The venture however created a new set of problems and rumours had been circulating regarding BASE's precarious financial situation. Now that the rumours have come to pass people in the industry are left to ponder the ramifications of the failed business model.

Mike Psillakis is a shaper running his own label on Sydney's Northern Beaches. Psillakis worked with Simon Anderson for eight years when Simon was working out of his Mona Vale factory. Because of the close ties Psillakis is sympathetic to all those involved at BASE. "I have the utmost respect for Simon, and Darren too," says Psillakis.

Asked why the BASE concept didn't work, Psillakis believes one of the reasons is they were too top heavy in staffing. "There were a lot of people who worked at BASE yet didn't touch a surfboard - reps, bookkeepers, secretaries, you name it. There's simply not enough margin in surfboards to cover all those wages."

"Team riders too," Psillakis added, "they are another cost. You've got to facilitate such payments just to break even." Darren Handley sponsored World Tour surfers Mick Fanning and Steph Gilmore. Another shaper I spoke to, who declined to be named, also said, "The outgoing costs, on admin and team riders, was never going to be covered by market prices. Workers need to get paid and each wage is a percentage of the final price. The margins aren't there in the surfboard industry."

The view, shared by a few shapers I spoke to, is that surfboard manufacturing is a very difficult business to scale up in size. Production line manufacturing is the typical method of increasing output, yet it's hard to make production lines viable with surfboards - they're notoriously time and labour intensive. The result is that time spent working on each board remains the same while staffing costs increase. Asian manufacturers can make it succeed largely through cheaper labour costs.

Some people I spoke to think it was as much the current economic climate as anything BASE did wrong. Luke Short, who shapes LSD Designs and up until a month ago was part of BASE, refused to point the blame. "Times were tough," said Short, "but they were for everybody."

It's a sentiment shared by Michelle Blauw, President of the Australian Surf Craft Industry Association (ASCIA). Blauw wouldn't share her opinion on the cause of BASE's demise saying, "the economy is tough for everybody," though she did concede, "they must've known they did something wrong. I don't know how anyone could get in so much debt."

Rather than pointing fingers Blauw would instead like to see the BASE collapse throw a spotlight on the industry and how badly it's faring. "Small manufacturers go broke all the time but you don't hear about it, yet now the big guys have fallen and the media is giving us attention. I'd like to see some positives come from this."

The Australian surfboard industry once had a very lucrative export market but the strong Australian dollar is now restricting exports and making imports - from both Asia and America - very competitive against domestic boards. I asked Blauw what is possible. "At this stage I'm not too sure. I couldn't rule government subsidies out, or tax concessions to protect the industry. What I do know is that if something isn't done soon in ten years we won't have much of an industry left."

Another thing Blauw is sure about is the need for all imported boards to be correctly labelled and the issue is high on the ASCIA agenda. "All imported boards need to be labelled so buyers know what they are getting." The bugbear is unbranded Asian-made boards masquerading as locally-made boards.

Mike Psillakis however, feels no threat from Chinese imports. "The Chinese market doesn't concern me. They make entry level boards only." On top of his model and stock boards Psillakis builds 3 to 4 custom boards per day and says "no custom boards come out of China." A staunch hand shaper, Psillakis says the only way to improve his craftsmanship, and hence create a better product, is by hand shaping.

Cory Roberts shapes Cory Surfboards in Victoria and he too feels less threatened by Chinese imports. "It's up to the market to show what we can provide differently than the Chinese," says Roberts. Like Psillakis, Roberts thinks custom shapes for the average or better surfer are an obvious point of differentiation. Diversifying with alternative shapes is another.

Asked about the BASE collapse Roberts was sympathetic to those involved but also optimistic about the outcome. "It could be the best thing to happen to the market in ages," Roberts said. "The last 12 to 24 months have been an incredibly creative time and this may enable young guys an entry into the market. This could help a cottage industry take a great leap forward."

Cottage industry: it's a term I heard many times while researching this story. The perception I gleaned was that, at the time BASE was conceived, the surfboard industry was in a semi-organised state and vulnerable to cheap imports. BASE sought to counter the threat by conglomeration but it has now failed and some are thinking that smaller, leaner operations - those lending themselves to a cottage industry - may be the best way forward.

Mike Psillakis was frank about it. In his view the top heavy staffing at BASE was a perfect example of why large operations don't work. "The surfboard industry should be a cottage industry," he said. "Rather than hiring lots of staff the shaper should be the secretary, bookkeeper and salesman. The surfboard industry can only work as a cottage industry."

Smaller and leaner may be one of the answers but Michelle Blauw believes all manufacturers - irrespective of their size - need to be clever, efficient and customer-driven. "The cottage guys will always be around and probably underpin the whole industry as that is where trends and innovation usually start." However, they "need to ramp up their game a little and find a balance between creativity and the basics of business," citing unanswered phones, late deliveries and environmental short-cuts as typical.

Further, Blauw says for the surfboard industry "to be taken seriously, so we can pass on our skills through proper apprenticeships, training and education and entice a whole new generation into the industry, we have to not only make great boards but also run businesses."

As a last point, Blauw says of the BASE failure, "Let it be a lesson more than anything else."

http://www.swellnet.com.au/news/2609-the-base-failure-what-it-means-for-the-industry

One of the most significant events in surfing for years
In some ways it effects all of us
The comments from some shapers in their forum are very interesting as well
It guess it's difficult to charge more for something that might not last a week
Good post Doggie

Certainly is a shame to see them go under. I like the comments in regards to the shaping business possible better off as a cottage industry, I reckon there are a few industries that are better suited to that sort of set up rather than making them bigger, better, faster, cheaper.

I pay a bit extra at local bottle shops, local grocery shops and in general dont mind paying a bit extra to support a local industry especially surfing. Cheaper is not always better when you read between the lines in most cases.

If you want to save $$ on something have a crack at it yourself I guess? I am yet to shape my own board but look forward to the day!

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Souwester said...
I pay a bit extra at local bottle shops, local grocery shops and in general dont mind paying a bit extra to support a local industry especially surfing. Cheaper is not always better when you read between the lines in most cases.

If you want to save $$ on something have a crack at it yourself I guess? I am yet to shape my own board but look forward to the day!

I agree totally on both points. I always try and get my groceries from the local farmers markets or independent shops when it's feasable, even if it costs more. I have my local surf shop nearby which I always go to to purchase wetties, clothing, wax, leashes etc even if it's not always the cheapest. Car parts are the only thing I always import.

As for learning to shape. That's my plan. I'm at this stage where I really don't know what boards I need. I've got so many different boards none of which are really suited to my style. I'm going to be getting a new board this month and after that I think I'll really look at shaping my own.

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TimKay said...

One of the most significant events in surfing for years
In some ways it effects all of us
The comments from some shapers in their forum are very interesting as well
It guess it's difficult to charge more for something that might not last a week
Good post Doggie

All shapers are back and making boards already. The quantities will be the same.

The only real effect to anybody will be that the bloated administration and dubious management is gone. Probably a very good thing for everyone remaining, perhaps not the investors or suppliers, they have the management team to thank.

What about the poor punters that ordered and paid in full for a custom and ended up with jack

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CMC said...

TimKay said...

One of the most significant events in surfing for years
In some ways it effects all of us
The comments from some shapers in their forum are very interesting as well
It guess it's difficult to charge more for something that might not last a week
Good post Doggie

All shapers are back and making boards already. The quantities will be the same.

The only real effect to anybody will be that the bloated administration and dubious management is gone. Probably a very good thing for everyone remaining, perhaps not the investors or suppliers, they have the management team to thank.

So did the "shapers" get out scott free? Simon has a new website up, its garbage the links send you all over the place, Murrays isnt much better. Couldnt even find DHDs site. How can they keep doing boards if they have gone under?!?

^^^^^
especially as they were directors

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smicko said...

^^^^^
especially as they were directors

Thats my point, how can they keep operating? Its not that I dont want them too, Ive had a board off each one of the three and liked them all..

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62mac said...

What about the poor punters that ordered and paid in full for a custom and ended up with jack

They need to speak to Darren or Muzza about that now that they are back in action.

How they can keep operating is like anybody that works for a failed company, the company falls over not the people. That's why you have a Limited Liability company you know PTY LTD..... It is also related to the ownership of the labels themselves, BASE did not own DHD, Bourton Shapes or Simon Anderson.

BASE is no longer operating but there is nothing in the law that says if you are a director of a failed company that you can never work again. As a director some debts simply must be paid as they become your own but life must go on. Anybody that thinks that these guys get off lightly or they collapsed the company on purpose needs to see a psychiatrist.

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CMC said...

62mac said...

What about the poor punters that ordered and paid in full for a custom and ended up with jack

They need to speak to Darren or Muzza about that now that they are back in action.

How they can keep operating is like anybody that works for a failed company, the company falls over not the people. That's why you have a Limited Liability company you know PTY LTD..... It is also related to the ownership of the labels themselves, BASE did not own DHD, Bourton Shapes or Simon Anderson.

BASE is no longer operating but there is nothing in the law that says if you are a director of a failed company that you can never work again. As a director some debts simply must be paid as they become your own but life must go on. Anybody that thinks that these guys get off lightly or they collapsed the company on purpose needs to see a psychiatrist.

I wasnt thinking they were getting off lightly at all and I wasnt aware that they were using their names/brand under the one banner.

Doggie didn't you know that

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62mac said...

Doggie didn't you know that

No, I didnt. So who pays in the end?

Looks like more than ever we will have to start supporting our local shapers
Especially here in WA
Probably be business as usual on the Gold Coast but probably more local boards in the shops here
A good thing as the big boys crash down to earth

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doggie said...

62mac said...

Doggie didn't you know that

No, I didnt. So who pays in the end?

i did the dicks with no board cmc i dont care what you say but these blokes would have access to the books and figures and by the amount of boards they were making and something would have had to click that things were not right. just like another building company on the goldy,rip everyone off and then start again with no probs under the guise of blaming others or as you say their names were not there but base was. a dirty technicality in business which keeps farkers going they might be naive but for the rest of the world that does not wash, especially in law,what is it, ignorance is not an excuse,unless you are in business...it is a cop out even if i was offered a another board i would farking laugh,give promotion to them pfffft,give me dms who you recommened and has not ripped a soul off fark them with a large black mans missile

Well said chriso - pure class mate , that's pisspoor treatment u got pisspoor

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chrispychru said...

doggie said...

62mac said...

Doggie didn't you know that

No, I didnt. So who pays in the end?

i did the dicks with no board cmc i dont care what you say but these blokes would have access to the books and figures and by the amount of boards they were making and something would have had to click that things were not right. just like another building company on the goldy,rip everyone off and then start again with no probs under the guise of blaming others or as you say their names were not there but base was. a dirty technicality in business which keeps farkers going they might be naive but for the rest of the world that does not wash, especially in law,what is it, ignorance is not an excuse,unless you are in business...it is a cop out even if i was offered a another board i would farking laugh,give promotion to them pfffft,give me dms who you recommened and has not ripped a soul off fark them with a large black mans missile

I take it the you are not getting your money back?

you've got to wonder when shapers ask you for all the $ up front do they have a cashflow problem in 20 years i never ask for mor than $50 -$100 up front.
i dealt with a large whitegood retailer here who wanted 100% UP FRONT two weeks before they went bust.

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katana said...

you've got to wonder when shapers ask you for all the $ up front do they have a cashflow problem in 20 years i never ask for mor than $50 -$100 up front.
i dealt with a large whitegood retailer here who wanted 100% UP FRONT two weeks before they went bust.

I know a couple that dont even do that, but some know their customers faily well I guess so its a trust thing. Colin never made me pay in advance.

I'm happy to pay my guy half up front, the equivalent $ of a PUPE board. It's a material heavy construction process though, and I appreciate what's involved.

Asking for a small deposit is only ever done with when its a new customer after that all is sweet no deposits needed again.

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Legion said...

I'm happy to pay my guy half up front, the equivalent $ of a PUPE board. It's a material heavy construction process though, and I appreciate what's involved.

Thats fair, as those things cost upwards of $1000 but worth it for the tech.

When I got the channel bottom shaped I paid him up front, Al didnt want me to, just a deposit he said. I think it cost me $830 all up with freight.
next time I will organize my own freight as $180 was a bit expensive but the board was undamaged when it got here so it was worth it I guess

no i didnt pay the full amount. i did pay big big deposit though. Not a phone call,not even a fark you sucker. when a thread was started about this before i thought the person was full off sh1t. then i read about it and have heard nothing since. alot of this type of rubbish happens here on the goldy,just didnt expect it from a board company. i know one thing though, if started taking money off people promising a product and knew they wouldnt get it i would be called a thief and charged with fraud or stealing...mmmmm we will see. i will stand by my comments that there is no possible way these guys didnt know what was going on and only the office plebs knew. i guess i dont trust or really deal with big companies and should have stuck with my ideals.

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chrispychru said...

no i didnt pay the full amount. i did pay big big deposit though. Not a phone call,not even a fark you sucker. when a thread was started about this before i thought the person was full off sh1t. then i read about it and have heard nothing since. alot of this type of rubbish happens here on the goldy,just didnt expect it from a board company. i know one thing though, if started taking money off people promising a product and knew they wouldnt get it i would be called a thief and charged with fraud or stealing...mmmmm we will see. i will stand by my comments that there is no possible way these guys didnt know what was going on and only the office plebs knew. i guess i dont trust or really deal with big companies and should have stuck with my ideals.

mate I reckon THEY did know it was all going up Poo-creek big time - that's what pisses folks

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chrispychru said...

no i didnt pay the full amount. i did pay big big deposit though. Not a phone call,not even a fark you sucker. when a thread was started about this before i thought the person was full off sh1t. then i read about it and have heard nothing since. alot of this type of rubbish happens here on the goldy,just didnt expect it from a board company. i know one thing though, if started taking money off people promising a product and knew they wouldnt get it i would be called a thief and charged with fraud or stealing...mmmmm we will see. i will stand by my comments that there is no possible way these guys didnt know what was going on and only the office plebs knew. i guess i dont trust or really deal with big companies and should have stuck with my ideals.

I agree with what you have posted there Chrispy, I find it hard to know why they went under after so long. We have many checks and balances with what we do also budgets to maintain. BASE must of known that they were going under well before it all went down. Great boards ect but jeezuz how many other people have been caught out like mr chru

I don't care what anyone say's,go hire the best tradesmen under a crap CEO the company will end in tears.

Sounds like they got a little head of themselves and became too top heavy with unproductive people on the pay role.Yeh that will fk any business.


Rumor has it another BIG player is in the sh-t right now.

Jesus mac - don't tell me it's GSI

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62mac said...

I don't care what anyone say's,go hire the best tradesmen under a crap CEO the company will end in tears.

Sounds like they got a little head of themselves and became too top heavy with unproductive people on the pay role.Yeh that will fk any business.


Rumor has it another BIG player is in the sh-t right now.

Who is that?

How could you not know you were in trouble if you were $5,2 mil in the red...like I said in the begining of this thread..the boys must have sucked it dry...this whole thing will have big repercussions...so they are now saying the only way to go is "cottage industry" isnt that a more glam name for back yarder...something the big manufacturers frowned upon ten years ago...I have been a "back yarder" for the last 20 years...great now Im a trendy "cottage industry"...I figured it out way back then that this is a mugs game and the only way to survive is to get a loyal clientel...make good quality boards and keep the overheads down...but this sending everyone into cottage industry may be the trades final death bell...Im old and at the tail end of my career so to me it dont matter a flying f#*k...but If my son came to me and said hey dad I want to be shaper...I would say, not on my watch son...and there lies the problem...if everyones cottage industry...nobody will be able to put on an apprentice and nobody passes on the skills....ding dong ding dong...bring out your dead...so get ready folks the day that the only surfboard that you can get will be a chinese copy, is a lot closer than we think...support your local shaper...you wouldnt be an ozzy...you woulndt be a true blue...if buying an ozzy board...meant nothin to you.

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BulldogPup said...

Jesus mac - don't tell me it's GSI

jesus bulldog...do you realise global surf industries is comming out of china....Michelle Blauw is right "the need for all imported boards to be correctly labelled"...we need that now.

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BulldogPup said...

Jesus mac - don't tell me it's GSI

i read areally good interview with the owner of them on swellnet. read that one doggie,good read