Pool product manufacturer looks to Southern hemisphere during winter months
When you can’t produce a year-round summer season for your pool products, you take the pool party somewhere else. That’s what Virginia Beach-based SwimWays began doing a decade ago when it started selling pool toys and spa and pool products to markets in the Southern Hemisphere, where the heat of summer occurs when the Northern Hemisphere is experiencing winter winds.
Jeff Arias, SwimWays’ senior vice president, manages the 20-year-old family company with his brother, David. Their father, Manny Arias, purchased the company in 1992-93 from the toy giant, Mattel. The toy manufacturer had earlier purchased the toy company Kransco in Virginia Beach and expanded it to include basic pool items, such as floats. There are about 125 employees worldwide, but the majority work at 5816 Ward Court, the Virginia Beach address of the manufacturing facility.
“When our father bought the company,” Jeff Arias says, “very little product existed. We had to be innovative to grow the business.” The company’s website, (www.swimways.com), touts making “free time more fun through innovation.”
In the U.S. market, the company offers a wide variety of 250 to 300 pool and spa products ranging from a $3.99 pool toy to a $200 pool lounge. “But in the overseas markets,” notes Arias, “we couldn’t possibly show that many. We have to introduce a few products at a time to allow buyers to become familiar with us. Our international market is only 10 percent of our business, but because the majority of it is out of our regular cycle [during Virginia Beach’s winter], it helps to even out our annual sales.”
U.S. customers find SwimWays’ products in-season ― from Memorial Day to Labor Day ― at national retailers such as Toys R Us, Walmart and Target. They are also for sale at sporting goods chains, pool dealerships and other stores. The multimillion-dollar company makes and distributes products ranging from sprinkler toys for the backyard to motorized pool toys, games and pool décor. Favorites include the Toypedo, a dive toy; Subskate, an underwater skateboard; and Rainbow Reef®, featuring a variety of kid- and battery-powered fish, turtles and sharks (guppies double as bath toys).
During the recent recession, company sales were flat, Arias says, whereas before 2007-08, the company had grown every year. “We’re now back up to where we were before the recession, and we’ve staffed up for 2013, which looks to be the best year we’ve ever had.” With pool owners and vacationers as the company’s targeted customers, he figures SwimWays is on track for 10 percent growth in sales this year.
The company doesn’t need to alter its marketing messages to sell products in its dominant international market — Australia — or in South Africa or South American nations. But it has had to make adjustments in packaging and design, such as those being implemented now for sales in the European Union, because of differing regulations in those countries. “It’s costly, but once it’s done, we’re ready for distribution,” Arias says. Among the company’s Virginia Beach employees are a dozen package and product designers.
In 2011 SwimWays went through the lengthy process of gaining approval from the Australian government to put the national flag’s design on a float. Overall, “Australia has been an easy fit for us,” Arias says, “because it’s so much like the United States in terms of its consumer base.”
With 60 to 70 independent sales representatives operating on a commission basis in the U.S., SwimWays is seeing growth in newer international markets, including South America. China, where SwimWays’ smaller toys are manufactured, is a potentially strong market because its population is becoming increasingly affluent. SwimWays has products for sale online in China and is considering initial retail distribution.
“Technology has had a tremendous impact on our business,” Arias says. “To be able to connect with someone in China, Australia or the E.U. in the same day ― or set up a face-to-face meeting through Skype ― is incredibly beneficial … The Port of Hampton Roads has also been a benefit of our headquarters location, as we ship by water to overseas markets.”
Even with the ease of electronic communications, however, travel is necessary. As the company officer supervising operations outside the U.S., Arias travels a great deal. With an office and showroom in Hong Kong, SwimWays has a lot of international buyers who visit there for a product review. The company also exhibits its products at the National Spa and Pool Institute’s annual trade show.
Economy of Australia:
Like the U. S., the Australian economy is one of the world’s largest capitalist economies. It is dominated by its service sector, including tourism, which is an important industry. Arias says nearly one-half the population lives within an hour of the coast. Australia’s per-capita GDP is higher than that of the U. K., Germany and France in terms of purchasing power parity. The International Monetary Fund has predicted that Australia would be the best-performing major advanced economy in the world over the next two years.
Most international travelers fly into the popular destinations of Melbourne or Sydney and then connect to Queensland, the Gold Coast and the Great Barrier Reef, the world’s largest reef. Rail transportation is good, with Trans-Australian Railway having the world’s longest stretch (297 miles) of dead-straight railway track. The nation’s unique wildlife is a point of interest for travelers.
Economy of Virginia Beach:
Although tourism has been the No. 1 industry of this city of 438,000 people for decades, agriculture still plays a major role, with 172 farms comprising 28,000 acres, including year-round farmers’ markets. Almost 35 million square feet of enclosed space for office and commercial use testify to the number of national and regional construction companies working out of Virginia Beach. The adjacent Norfolk International Airport and Port of Hampton Roads provide major transportation advantages.
Visiting Virginia Beach:
With its 515,000-square-foot, green-certified convention center, the city hosts many business and group travelers as well as tourists. Besides miles of beaches, attractions include museums such as the Virginia Aquarium and Marine Science Center, historic sites such as the Cape Henry Memorial Cross and adjacent 1792 Cape Henry Lighthouse, and major annual arts and recreational events such as the Virginia Arts Festival and the Rock and Roll Half-Marathon.