Boil the Ocean Blog Website’s Ramble About Alien Workshop Closing Down

“Everyone is just totally winging it, all the time,” the Guardian smirkingly intoned this week, from Barack Obama on down, dudes are doing what they can in the moment to get by and talk the talk, if not necessarily walk the walk. “This realisation is alarming at first, but it’s ultimately deeply reassuring,” blogmeister Oliver Burkeman commentates as he posits the power-brokers of the world staggering from crisis to crisis and trying not to let us see them sweat.

Approaching a 20-stair handrail — never mind the gaggle of screaming girls marauding downtown Los Angeles* — Rob Dyrdek can’t buy himself a few seconds with which to make second guesses, by snugging down his beanie or flipping open his cellular telephone. He trusts his gut, charges it and rolls on to the next obstacle. In the skateboarding business Rob Dyrdek has gained renown as a master tactician and virile negotiator. To wit, eight months ago:

“The DNA Brands are in great hands,” said Rob Dyrdek who will continue as minority owner and team rider of DNA LLC. “Chad Foreman and Pacific Vector, together with the three founders, Chris Carter, Mike Hill and Joe Castrucci, have created the perfect partnership to grow and develop the DNA brands. With their combined expertise, talent, and drive, the possibilities are limitless.”

Limitless by design, even. Yet, there are financial tiger traps and jackal-like lenders lurking within this Jungle Book where Rob Dyrdek, who we imagine here in a loincloth as the fictional young boy character of Rowgli, passes his days skipping from deal to deal, handshake to endorsement. But there are cold nights in which them shadows transform that throng of hormonal tweens into a pack of bloodthirsty bondholders, nipping at the heels of precocious and carefree business ventures.

23 May 2014 20:50 EDT Press Release: Pacific Vector Holdings Inc. Provides Corporate Update

CARLSBAD, CALIFORNIA–(Marketwired – May 23, 2014) – Pacific Vector Holdings Inc. (TSX VENTURE:PVH) (the “Company”) is providing this corporate update.

As announced on May 15, 2014, the Company required an immediate bridge of three hundred thousand dollars which would have allowed for the payment of current obligations. The Company was unable to obtain the required bridge and as a result, a first secured lender whose one million dollar loan was due April 17, 2014, has filed a notice of default. In addition, another secured lender, owed four hundred thousand dollars which matured on April 21, 2014 and an unsecured lender, owed one million dollars which matured on October 31, 2013 have filed notices of default. The Company is diligently working to cure the defaults in the next five days.

About Pacific Vector
Pacific Vector is an action sports retail and consumer brands company.**

Earlier this year, in a candid bro-to-bro moment that involved defining a douchebag and ruminating on the import of being checked for prostate cancer so as to flourish and enjoy the various triumphs of Gulf War military commander Norman Schwartzkopf, Rob Dyrdek revealed what it is like to slam on the 20-stair M&A handrail.

“I grew up, the skateboard company I turned pro for, was from Dayton, Ohio. And 20 years after they started they sold to Burton Snowboards… and they were having a lot of trouble, and I went out and bought that thing. Because I was like the kid from Ohio, 20 years later, comes around and buys the company. And I got slapped across the face in reality of emotionally purchasing a company and being faced with a hornet’s nest on the inside of trying to turn it around and involve people that have been doing something for 20 years. It’s a brutal lesson I have learned this year that I will never face again.” (19:30)

Josh Kalis, who rode for AWS 12 years and seems to care about those dudes as deeply as anybody even after quitting a couple years ago, told Jenkem this year that he believed Dyrdek did the right thing selling DNA to Pacific Vector, despite doing so under some duress:

“Well to tell you the honest truth, Rob really seriously tried to keep that shit the way it needed to be. He gave the power to those pros, and was like, let’s make this right. Dyrdek was going broke keeping Alien Workshop afloat, that’s what people don’t know. As far as the impression I have, he was paying for every single thing out of his own pocket, to where, he was spending more money on Alien then he was bringing in from everything else and it was breaking him. He had to do something. That dude lost millions of dollars trying to keep it going. And he did that for the dudes, for the original owners, he did it for the current pros, he did it for all of us. It was just too much. Now, half of it is owned by this new company, which is being head up by Chad who helped build Blackbox with Jamie Thomas. So I look at it as it’s in good hands.”

Among the difficult things to understand about the apparent collapse of AWS is how a top-tier company with a globally recognized name and graphics and lore, years of consistent promotion by a certified TV star, regular video output, potentate pros, and decades-long ties to retailers and wholesalers and suppliers, can’t make it work. At a time when relatively small companies like Palace and Polar (spiritually indebted to the Sovereign Sect) are balling for position on shop racks, when Jereme Rogers and Brian Wenning and James Kelch and Alex Olson and seemingly anybody else with a couple dimes to rub together can up and start glossy or gritty board concerns that don’t immediately evaporate, when companies as far removed from their respective heydays as Santa Cruz, World Industries and Blind can persist, why not a company as storied and comparatively still-vital as Alien Workshop?

“It was just getting harder,” DNA’s self-identifying “business guy” Chris Carter remarked upon an IASC panel three years ago when outlining his reasons behind selling to snowgoods maker Burton in 2008. The global economic slowdown had something to do with it, he said; Europe was “tough” and DNA had missed its window to sink American dollars into a European distribution of its own back in the early ’00s when the company was flush. “The deck company used to be the marquee brand,” Carter said, name-checking to seven-ply titans of years gone by such as Vision, Sims and Powell. Some time ago shoes assumed that spot and “deck brands are getting pushed further and further down.”

Chris Carter mentions several times decks’ commoditization, as AWS and Habitat competed for wall space and parental plastic against an expanding range of shop boards, blank boards and smaller rivals with slimmer payrolls and less overhead. Josh Kalis in the Jenkem interview figured monthly board sales of his own models fell from 6,000 decks per month in the Year 2000 to 1,000 by 2004. Archival records indicate that during this period Josh Kalis was not imprisoned for crimes against humanity, did not vie for the title of “world’s worst person” and clubbed no baby seals.

By this point DNA, already bicoastal, considered itself a global deck merchant, as per Chris Carter. Kalis and Dyrdek’s Seek imprint, which seemed directionless early on and destined to rank alongside PJ’s Undapendent records and “Street Dreams” in the slam section of Rob Dyrdek’s business career, nevertheless reflected DNA’s ambitions to build an international team in the early 00’s. Lengthy European stays became de rigueur for top-shelf video parts and retaining occasionally destructive travelers such as Danny Renaud further padded expenses. In Dayton DNA supported a loyal employee base, one-third of which Chris Carter in his talk estimated had been there for a decade or longer by 2008, who deserved things like benefits and retirement plans.

“You can call it selling out, I call it selling in,” Chris Carter said of the Burton deal, which in three years would teach him more about running a company than he’d learned on his own over the prior ten, he said. Burton’s financial posse were a disciplined lot and transfixed by profit margins, forecasting, lending rates and tinkering with distribution networks; under Burlington’s watch, DNA grew for three years straight, according to Chris Carter. Yet even they were unable to tame fallout from the 2008 worldwide credit crunch, and in response to consumers’ diminished thirst for snowboards and coats, Burton trimmed its portfolio in 2012, pulled out of the skate shoe biz and offloaded the DNA unit to millionaire teamrider Rob Dyrdek, who reportedly gushed before the deal was even complete that he intended to own Alien Workshop forever.

Are Dyrdek Enterprise’s accounting darklords as sophisticated as Jake Burton’s? It is difficult for a person to know, but soon Dyrdek, Carter and Hill would venture onto a corporate path far afield from the frugal one Chris Carter charted in 1990, as described to the IASC audience: “We just saved our money. We actually financed it all ourselves …we started the company with $26,000. That was the startup capital. We were equal partners in the business. It was basically self-funded. We didn’t borrow any money. In fact, in the history of the company we never borrowed any money. We never took a bank loan. We never used a line of credit, not one time. We borrowed to buy a building and that was it. It was all self-funded. …We reinvested all the money back into the company.”

Amid the dark nights of soul Rob Dyrdek would later confide to Larry King, he determined to parlay DNA into a larger and more-diverse extreme sporting venture. About 18 months after cementing his DNA purchase, Rob Dyrdek in October 2013 sold it to Pacific Vector Holdings, for most of its lifetime a sunglasses company that in recent years had absorbed several extreme retail stores. Rob Dyrdek’s deal seemed to involve selling DNA for a stake in the enlarged company, for which he appeared to have a broader plan, since earlier that year the company licensed rights to develop “Street League” stores in return for royalty payments.

Pacific Vector aimed to expand given the sunglasses business appears not to have been a profitable one for the better part of a decade. It’s difficult to get the full picture from the financial statements filed by Pacific Vector via Canada’s SEDAR filing system, but they do show net annual losses each year going back from 2012 to 2005, ranging between $199,000 and $1.7 million, while annual sales were between $1.4 million and $2 million***. The jury remains out as far as 2013 results — at the beginning of May Pacific Vector notified investors that these couldn’t be filed on time because the company was still working on getting financing and couldn’t pay auditors to look over the numbers.****

Two weeks later the “Alien = done” topic materialized on the SLAP board; employees and team members were rumored to have been laid off, AWS mothballed, poignant malt-liquor photos posted to instagram accounts. The messageboards have Habitat architect Joe Castrucci retaining some intellectual property associated with the company and potentially replanting company and team beneath a different distributor, while posters rumor that Rob Dyrdek is considering a court battle for control of Alien, or the company potentially sold at auction.

For those with fond memories of skating the boards, rewinding the multicoloured videotapes, squinting for hidden messages in adverts and appreciating the gradual mind-warping at work, the options are not great ones. Alien could go away, perhaps not on its own terms, but with its legacy secure and on a respectable note as far as output, pro-personnel and stature; to some this is the preferred option. A Blueprint-like resuscitation seems a real and depressing possibility, given the nine lives that some shoe and clothing companies seem to have been imbued with in recent years. The moon-shot would be for Rob Dyrdek to again ride to the rescue and restore AWS in what would almost assuredly be some stripped-down fashion. Zen-stated wallride beltholder Jake Johnson for one has stated his intent to chill for a while and see whether AWS can work it out.

Could an Alien Workshop with a smaller team, scaled-back selection of t-shirts and hats and whatnot, and a sensible travel/video schedule be able to pay its HQ staff a living wage, cover Carter/Hill’s mortgages and not drain further dollars from Rob Dyrdek’s coffers? Does Rob Dyrdek have any more tricks yet up the sleeve of that DC Shoes varsity jacket? Have Carter and Hill dug out their basement-buried gold ingots yet? Will the retired Heath Kirchart return the favor and continue to consider a defunct Alien Workshop his board sponsor?

Alien Workshop’s passage into shadow, permanent or not, is worth pondering. It would seem the biggest board company to go out since Plan B, and casts a singular and long cultural shadow. For a lot of people it is deeply personal. Like Girl/Chocolate, Toy Machine, Zero, Black Label, Powell Peralta, Baker and maybe a few others Alien Workshop not only resided among the top tier of a fickle and trend-driven industry for many years, it changed and directed the conversation with graphics and videos that couldn’t have come from anywhere else and inspired various acolytes and copycats. This blogging web page from time to time has taken a critical way with Alien Workshop and Habitat, and that is because the people running them have produced work worth holding to very high standards. Among the several possible outcomes mentioned earlier Boil the ocean Weblog very much is pulling for #3. While we wait, wander through the Black Hole.

*They call Los Angeles the “City of Angels” according to the US movie “The Big Lebowski”
**Versus earlier press releases in which Pacific Vector billed itself as a “premier” action sports retail and consumer brands company.
***For perspective, DNA at the time Pacific Vector bought it had sold $7.5 million worth of boards and clothes and whatnot over the prior 12 months.
****Earlier in the year, Street League and Pacific Vector dropped their plan to build Street League stores.

Tags: Alien Workshop, Memorial Day