Burton Snowboards Is King of the Hill

CEO Laurent Potdevin at Burton's flagship store in Burlington, Vt.

In the 1980s and early '90s, snowboarding was a sport of renegades. Skiers protested as young, etiquette-lacking adrenaline junkies with neon hair and baggy pants went bombing down the slopes with lawless abandon, sliding across picnic tables. Soon, ski resorts began banning snowboarders, further cementing the riders' image as outcasts.

Today, snowboarding is a mainstream pastime. "It's at the point where you've got your little sister, your mom, and your grandma out there," says Joel Muzzey, senior editor of Transworld Snowboarding magazine. (Snowboarders have even come to peacefully coexist with skiers.) This demographic transformation of the sport, which has grown from 2.5 million participants in 1997 to more than 5 million today, poses challenges for snowboard manufacturers, who must stay true to the sport's roots yet cater to the masses and a new generation of riders. (After all, the original misfits are now raising kids.)

The king of this $487 million industry, Burton Snowboards, has the right idea. The privately held company makes boards, clothes, and snowboarding accessories, claiming 40 percent to 70 percent market share (depending on the category). An adaptive strategy ensures the near-constant debut of new board models and fashions, allowing Burton to keep pace with ever-changing trends and to grab a piece of the increasingly lucrative kids' and women's markets. And in a potentially savvy move, Burton recently made an epic jump from pure snowboarding company to year-round dealer of surfing, skateboarding, and snowboarding gear.

Laid-back digs. Burton's Burlington, Vt., headquarters represent a radically different corporate culture. A walk through the Subaru-filled parking lot provides a glimpse of employees skateboarding in a bowl behind the building. And once you enter Burton's lobby, you'll find overstuffed couches surrounding a fireplace. The feel is ski lodge.

Right away, it's apparent that Burton is young; the average employee age hovers near 30, and work spaces contain everything from mini bars to vintage boards to spare flip-flops. Perks include a ski-resort season pass, the chance to test and borrow equipment, and the privilege of bringing dogs to work. And should more than 2 feet of snow fall on Burlington in 24 hours, work is canceled in favor of the slopes. "It's a good balance: a laid-back and very casual atmosphere where people work hard and set high standards for themselves," says Burton's chief executive, Laurent Potdevin, 41. "So we get to blur the lines between lifestyle and work environment."

That philosophy harks back to the beginning. After walking away from a job at a Manhattan investment firm in the late '70s, Jake Burton went to work in a Londonderry, Vt., barn, modifying a 1960s toy called the Snurfer, which was essentially a plywood skateboard with no wheels and a leash. He built roughly 100 prototypes before deciding on a construction (an early model hangs in his office). Burton founded the company in 1977, first selling models out of his station wagon. "Some days, I'd return home with just as many boards as I'd left with," says Burton, 54, who came close to bailing when he found himself $100,000 in the hole. Fast-forward to today: Burton now boasts one of the biggest brands in the industry; maintains offices in California, Australia, Austria, and Japan (the company does more than half its business overseas); and sponsors a stable of pro riders, including Olympic half-pipe champion Shaun White.

Hard core. Burton's main business is hard goods: boards, boots, and bindings. Engineers and designers make the gear at a manufacturing center 10 miles down the road. This setup allows fluidity in production; engineers can turn around a new board in as little as two weeks (although complex designs can take as long as four years). Meanwhile, techies test products in a sort of in-house science lab. To measure their durability, boards are frozen, smacked with hammers, and crushed by machines. Boots are pushed and pulled repeatedly to test their flexibility. Burton then turns to its team of pros and amateurs, who take the boards to the slopes and subject them to different riding styles and terrains.

Board designs range from minimalist to psychedelic to "the point where I'm embarrassed to show my mother," says Todd King, 36, business unit director for boards. The names are also inventive: Try Lux, Feelgood, Blunt, and Vapor on for size. Customers can also design their own boards by submitting artwork or a photo (Gene "The Demon" Simmons of the glam-rock band Kiss had one made featuring his own mug).

Image matters. Like its boards, Burton's apparel is anything but vanilla. Jackets come in denim, plaid, camouflage, and polka squares, and some even contain hidden shirt cuffs with thumbholes—"fully technical," says John Lacy, 33, vice president of soft goods. The company is steadily growing its women's line. Although females make up roughly 25 percent of all snowboarders—and have for most of this decade—they're spending more these days on shorter and lighter boards. "Retailers are recognizing that women are serious participants and they're interested in serious equipment," says Kelly Davis, director of research for trade group SnowSports Industries America (SIA).

Although Burton is going for multi-generational appeal, "ultimately, it's still about youth," says Potdevin. And he's not kidding. The company now makes a Mini Shred line, which includes children's suits in sizes from toddler up to age 6 in prints like "Candy Camo." It also consults focus groups made up of the junior-high set. "Twelve-year-olds are outriding adults, they're rocking the pink pants...and if they want skulls on their jackets, we turn it into reality," says Lacy. Since most snowboarders are 18-to-24-year-olds, the company also stays tuned to the college crowd (popular is Burton's Lil Buddy, an insulated bag with a removable speaker system and room for a cold 12-pack).

Maintaining a nonconformist image undoubtedly plays into Burton's decision to remain a private company, says Eric Tracy, an analyst with BB&T Capital Markets, who covers competitors Quiksilver and Volcom. "These companies have to tread lightly and not dilute their brand," he says. "That's probably one reason Burton never went public. Because as a private company, you're not 'selling out.' "

Burton's move into the surfboard and skateboard markets (via the acquisitions of Channel Islands Surfboards and DNA Distribution in 2006 and 2008, respectively) has allowed it to capitalize on fast-growing, all-weather sports and spread its risk at the same time. The peak year for snowboarding participation was 2004, SIA says, when 6.6 million riders took to U.S. slopes. That number has since fallen to 5.1 million, mainly because of the weather, says Davis. Pair unseasonably warm winters with the sport's increasingly steep price of entry: gear, lift tickets, and gas for reaching the mountain. A typical setup, including board, boots, and bindings, costs roughly $540 (Burton's boards range from $300 to $1,000).

The skateboarding and surfing crowds aren't that different from Burton's core audience, as snowboarding is "practically a snowbound version in terms of the aesthetic, tricks, and marketing," says magazine editor Muzzey. It takes a well-established company to pull off a move into these West Coast-based product markets, says Tracy, but "Burton is opportunistically making inroads." One big payoff is immersion in extreme-sports attire, a niche that's growing faster than the overall apparel market.

So what's next for Burton? "We're focused on growing these businesses and further opening the door to markets like Latin America, Australia, and China," says Potdevin. Perhaps there's another extreme-sports market out there waiting to be conquered.