Surf and outdoor industry executives shared insights into the current market, forecasting a period of recalibration and modest growth on SESO’s webinar this week, called “Looking Ahead to 2026: Challenges, Strategies, & Opportunities.”
Moderated by SESO Editor-in-Chief Tiffany Montgomery, the discussion featured:
- Shaheen Sadeghi, founder, LAB Holding – Founded LAB Holding in 1991 after serving as president of Quiksilver, developing innovative retail spaces including The LAB Anti-Mall, the Anaheim Packing District, The Camp shopping center, and more. He also owns outdoor lifestyle store Seed People’s Market and various other stores, bars, and restaurants.
- Daniel Neukomm, CEO, La Jolla Group – Leads the platform for global consumer lifestyle brands including O’Neill Clothing, Mountain Khakis, and Hang Ten, guiding growth through direct-to-consumer and wholesale initiatives since 2012.
- Cassie Abel, founder and CEO, Wild Rye – Founded the B Corp certified women’s outdoor apparel brand in 2016, achieving recognition on the Forbes Next 1000 list and being named Outdoor Retailer Emerging Leader of the Year in 2023.
- Pete LaBore, CEO, Christy Sports – Oversees the specialty outdoor retailer’s 50 locations across four states, bringing more than 20 years of executive experience from companies including Backcountry and Reformation.
- Nathan Pund, managing director and global head, Houlihan Lokey’s Active Lifestyle Team – Advises on M&A and capital markets transactions in the consumer industry with nearly three decades of experience, having completed more than 50 deals in the outdoor and active lifestyle sectors since 2005.
The overarching sentiment for the coming year is “cautiously optimistic,” according to Neukomm, as panelists acknowledged a complex landscape shaped by supply chain issues, consumer behavior shifts, and economic pressures.
Below find some of the highlights from the discussion and watch a full replay here.
The Mediocre is Suffering, Excellence is Performing
A recurring theme was that high-quality, authentic brands are thriving while mid-tier or mediocre offerings are struggling. Shaheen Sadeghi noted this trend in both retail and the restaurant business, stating, “with this economy, mediocrity just doesn’t last.”
He observed that well-run establishments with a strong following continue to perform well, even if they aren’t in the high-end luxury market. This indicates a consumer base that is more discerning, prioritizing value and quality over homogenous, mass-market products.
Community as a Cornerstone of Success
Cassie Abel highlighted that Wild Rye, a women’s outdoor apparel brand, has been in a high-growth period, which she largely attributes to a strong brand community. She explained that from its inception, the brand has been transparent and purpose-driven, sharing its values openly with customers.
“We’ve been very direct with our community, very transparent, very authentic,” Abel said. This approach, including educating customers on issues like tariffs and supply chain delays, has built a loyal following. The success of a recent crowdfunding campaign further demonstrated this deep connection, as it invited the community to invest in the brand’s future.
Shifting Focus from Acquisition to Retention
Daniel Neukomm of La Jolla Group, which operates O’Neill Clothing and other brands, explained a strategic shift toward customer retention over acquisition. Faced with tariff-fueled supply chain challenges that led to increased minimum order quantities, the company chose to create scarcity by buying “narrower and deeper.”
This move, coupled with a conscious decision to focus on the incremental value of each customer, allowed them to maintain a healthy business. Neukomm also noted the turbulent landscape with major surf brands like Quiksilver and Billabong, reinforcing the decision to “stick to our lane” and be a reliable solution for retailers and consumers.
The Power of Localization in Retail
Shaheen Sadeghi, a veteran of both brand management and commercial real estate, emphasized the growing importance of localization. He spoke of a cultural shift away from “homogenization and pure consumption” toward “localization, personalization, customization.”
Sadeghi sees a trend of “micro-manufacturers” who want to sell directly to their consumers, bypassing traditional retail models. His company is developing retail centers designed to house these makers, creating a more direct and authentic connection. He believes that for retail to survive, it must foster a sense of community and social interaction, something that cannot be replicated online.
Modest Growth and Lingering Price Increases
Looking ahead to 2026, Pete LaBore of Christy Sports anticipated modest growth for the ski and outdoor retail sector. He noted that after a period of being in “maintenance mode,” the company is now preparing to get back into a growth phase, which includes potential acquisitions of more retail stores.
However, he also expects further price increases from brands, partly due to unresolved tariff issues. LaBore believes the industry as a whole needs to find ways to grow to sustain itself against rising operational costs. “We have to find ways to find some modest growth to sustain,” he said.
Interest Rates and the M&A Market
Nate Pund provided his perspective on M&A, explaining that while there are many buyers interested in the active lifestyle space, market uncertainty has made deal-making challenging. He identified falling interest rates as a critical factor for a rebound. Lower rates not only reduce the cost of financing for acquisitions but also increase consumers’ disposable income by lowering the cost of home loans, auto loans, and credit card debt.
“For me, interest rates are critical,” Pund said. “It’s a critical one that would certainly be helpful all across the board.”
The Path Ahead
The panel concluded that navigating the future of the surf and outdoor industries will require a steadfast commitment to core principles. Authenticity, building a strong community, and driving true innovation are not just buzzwords but essential strategies for survival and success.
As Shaheen Sadeghi put it, the industry is in a “recalibration mess,” but the underlying interest in outdoor activities remains strong. More people are surfing and getting outside than ever before. The brands and retailers that can genuinely connect with this passion, offer great products, and adapt to the changing landscape will be the ones to thrive.
Sadeghi’s final advice resonated with the panel’s consensus: “If you’re authentic… you’re going to come out just fine. But if you’re into it just for the money, and you’re not authentic, then it’s a good time to exit.”
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.
