Veteran skater Globe rides out downturn in global skateboard market
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The days of youngsters poppin’ ollies and grindin’ rails in the local skate park are on the decline and skatewear company Globe International is feeling the burn.
The global skateboard equipment market is a slow burner – forecast to grow only 1 per cent annually in the next three years, according to TechNavio’s global skateboard equipment report 2016-2020.
That is despite an increased exposure of the sport, which set to feature in the 2020 Olympic Games and in developing regions through South-East Asia where it historically hasn’t been popular.
“Globe International Group weathered the storm of a downturn in the skate hardgoods market — a major segment of the business,” chief executive and co-founder Matt Hill told shareholders at the Globe (ASX:GLB) annual general meeting on Thursday,
“Regionally, the Australian division continued its strong run, posting sales and profit growth over the previous year. In North America and Europe sales declined as a result of the skateboard hardgoods market.”
Hardgoods relates to anything to do with the skateboard — the deck, trucks, wheels or associated accessories such as grip tape.
Europeans seem to be leading a downward trend, posting a decline leading to a 36 per cent downfall in sales over the year.
Results come at the 30-year milestone for the company, first established in the glory days of the skating movement.
Globe quickly rose to fame with its ubiquitous skate shoes in the 1990s and reached a peak market cap of almost $1 billion after listing in 2001.
Globe shares were last trading at $1.10, giving it a more conservative market cap of $45.6 million. The shares have traded between 85c and $1.20 in the past year.
A change in the skating scene has seen the company expand from the skate shoes that made them popular, into surf and snow wear as well as workwear.
Mr Hill said the year had been tough for the company, with revenue down 7 per cent, though growth in apparel brands had buoyed the hard goods decline.
But things were looking up for the future, he said.
“During the first quarter of trade of the new financial year, sales were roughly in line with the prior year, while profits were up moderately compared to the same time last year.
“This is a result of our efforts in the prior year to restructure and rationalise our cost base in regions and brands that were falling behind.
“We expect Europe and North American divisions to grow in revenue, while Australia is expected to be slightly down in revenues this year.”