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SANTA CRUZ — In the early days, before skateboarding had developed beyond a sports fad that cycled through retailers every decade or so, a couple of Santa Cruz surfers were selling board materials and putting together cheap skateboard parts so they could “ride the asphalt” when the waves were flat. They were young, creative and in love with surfing.
“It was never about making money,” said Richard Novak, 71, who co-founded NHS Inc. in 1973 with surfboard-maker Doug Haut and Jay Shuirman. “All we cared about was surfing.”
Celebrating 40 years in business this year, NHS is now a multimillion-dollar venture and the oldest company in the world dedicated to selling skateboards.
Despite the ebbs and flows of a shifting customer base, NHS has managed to ride the waves of the industry. With 13 brands, the majority of the business is still about skateboards, related products and clothing. But, through the years, the company has broadened its offerings to include snowboards, surfboards, and related apparel and accessories.
Diversification has helped NHS weather the fierce cyclical nature of the sports it serves.
“These industries all have these periods,” said Novak, who remembers when skateboarding involved maneuvering a two by four on a couple of roller-skate wheels. “It goes up and down and up higher and not as low. Hopefully, you catch it earlier. I’m really good at that, probably the best in the industry at it. I’m the only guy that survived.”
These days, there are actually fewer participants in skateboarding, surfing and snowboarding but the company is still growing, according to Bob Denike, NHS president and chief executive officer. The company employs about 95 people in an old cannery in the Seabright area of Santa Cruz. Denike estimates that about half of them have been with the company for more than 10 years.
“As a company, we are still growing in market share,” Denike said. The recent global recession curbed sales but seems to have bottomed and begun to turn, he said. The plan is to grow 10-15 percent in the next year. The privately owned company declined to state current revenues but has reported in previously published interviews that revenues topped $20 million in the ’70s, $50 million in the ’80s and, just four years ago, revenues were more than $23 million. With products sold in more than 70 countries, some of the fastest growing sales are in South America and Asia.
“Richard would say you never know when the waves are going to come up, you catch the wave and sometimes it’s great,” Denike said. “Business is all about being ready for the wave to come in and having a business that can capitalize on it.”
Building the industry
“I always knew how to buy and sell stuff,” said Novak, who describes himself as a businessman with street savvy.
The company actually started in 1969 when the co-founders were supporting their surfing lifestyle by selling fiberglass raw materials to people making surfboards, boats and vehicle fairings. An answering service collected orders while they were out surfing and they delivered products later in the day. In 1973, they got an order from a friend, Jimmy Hoffman, in Hawaii for 500 skateboards and fashioned the decks from leftover fiberglass material. They used loose ball bearings, urethane roller-skate wheels and roller-skate trucks and they sold out immediately. The next order of 500 skateboards sold out again and they were in business. They incorporated that year.
In 1974, Novak, Shuirman and several of their early skateboard entrepreneurs met in Los Angeles to map out a vision to grow the nascent industry. (Haut had left the venture to focus on Haut Surfboards.) The competitors settled on a margin for business, a formula to avoid undercutting each other to compete. Wrestling the fad from the roller-skating industry, they sponsored events, a generation of professional skaters, new industry publications and they nurtured the aesthetic soul of the edgy industry while developing new technologies for emerging skateboarding styles. It was an informal industry council agreement that lasted through the ’80s when bigger players from outside the industry began to cut into market share and reshaped the industry again.
“They built the industry before they built their business,” said Denike who became one of the early product testers as a 15-year-old when he was approached by Novak and Shuirman in a skateboard park. “It was just raw entrepreneurial spirit. They took it from a fad to an actual business and, as a group, decided they were going to focus on growing the industry. If they were good businessmen, they would get a piece of that pie.”
That same year, Shuirman and Novak, along with inventor Tony Roderick, had introduced the Road Rider, using a revolutionary material for the wheel and precision bearings, replacing the problematic loose ball bearings common at the time. In the next six years, they sold about 18 million of them before the market fell apart. Skateboard sales plummeted. They had just created the Independent Truck Co. to sell a new kind of truck — the device that holds the wheel to the deck — when, in 1979, Shuirman died leukemia at the age of 40. It was a tragic time for the company.
“I was the backbone of the company and he was the front end,” Novak said. “He’d come up with the idea and I’d figure out how to make it. I had to evaluate what I had at the time and begin to rebuild.”
Novak and his small team financed a foundry and began building skateboard trucks. He partnered with another company to make wheels and eventually began a partnership to sell in Europe.
The Santa Cruz brand
The company’s Santa Cruz Skateboard brand is so well-known globally that some people don’t even know it’s origin is an actual city, said Terry Campion, owner of Santa Cruz Boardroom, one of the largest skateboard retailers in the state, as well as Santa Cruz Apparel in Capitola. Just this summer, a group of Australians came into the store and said just that, he said.
Campion is one of several local businessmen who refer to Novak as a mentor. Campion worked for NHS in sales for more than 18 years and more than 70 percent of the merchandise in the Boardroom is an NHS brand.
“Richard’s impact on skateboarding is unbelievable,” Campion said. His store, on 41st Avenue is located in the original NHS skateboard company headquarters. “You mention Santa Cruz Skateboarding anywhere in the world and anybody will recognize it.”
Rob Roskopp was another early NHS-sponsored skater who worked for the company and was mentored by Novak. Nearly 20 years ago, Novak helped him, with both financing and practical advice, launch Santa Cruz Bicycles.
“He’s always been my mentor,” Roskopp said. Despite Novak’s unorthodox style, he’s fairly conservative in business, Roskopp said. “He says, ‘Don’t get too far ahead of yourself.’ ”
Novak says it’s his way of giving back.
“That’s my charity, to go out and help people,” he said. “Rather than throwing money at them, I’ll help somebody out with my experience. I’m lucky if I can share my luck with people.”
The latest wave
Just inside the entrance of the company headquarters, is a new, private skateboard museum showroom packed with history. Skateboarding memorabilia, including early prototypes, artwork and looping videos of professional riders depict the wild ride of the sport in its early days. An unattributed quote on the wall says, “We stumbled upon a skateboard business.”
While that may have characterized the company’s roots, the last decade has been a shift.
“For the company to survive and move into the future, it needed more structure,” said Denike who has been with the company for 26 years. He took over as president about 12 years ago and as chief executive officer about five years ago. He meets with Novak weekly but, these days, Novak says he is an adviser and tries to let people make their own way at the company.
“We couldn’t lose that entrepreneurial spirit that Richard created, but there’s more planning and goal-setting and strategic three-year and five-year plans. It needed to happen,” Denike said. The company needs to adapt to quick market changes. “The businesses we were in five years ago are different than what we’re in now and the businesses we’re in five years from now will be different. We never know what’s coming. It’s back to Richard’s analogy of surfing. You just have to be ready.”
Follow Sentinel correspondent Jennifer Pittman at Twitter.com/jenniferpittman
AT A GLANCE
ABOUT THE COMPANY: The privately owned company makes skateboard equipment and apparel as well as snowboarding and surfing equipment, selling products in more than 70 countries and sponsoring 400 athletes.
HEADQUARTERS: 104 Bronson St., Suite 9, Santa Cruz
INFORMATION: 831-459-7800; www.nhs-inc.com
LEADERSHIP: Bob Denike, chief executive officer and president; Richard Novak, chairman
EMPLOYEES: Employs about 95 people at its headquarters.
This article on the skateboarding industry was published here.