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Matt Powell April 9, 2009 Magazine Production and Editing

0540421 Feature Article – Final Draft

Fore! Golf retail is surviving, but can it dodge obstacles for much longer? At first glance, there’s very little indication that the contents of the store on the corner are a golfer’s dream. Its red brick, kelly green window coverings and white block lettering make it look like an oversized Christmas gift.

Entering the store is a whole other world: an overwhelming number of golf clubs, golf balls, golf shirts, golf shoes, golf trinkets, and golf this and that stare you directly in the face with a welcoming glare. Clubs shine under the fluorescent spotlights as if sent by God himself to make your game better than it should be. A plethora of coloured shirts, socks, pants and shoes carefully placed on racks. Golf balls scattered throughout, placed strategically by brand and price-point.

Targetlines Golf Centre has been on the corner of Mulock and Sandford in Newmarket since 1991. It flourished as an indoor range and practice area for golf addicts during Ontario’s bitterly cold winters, gradually escalading into a golf retail shop. It has dominated the area’s golf market since 1996, when Lee Webber, a former district manager for Zellers, bought the store from its owners, who were all professional golfers. Since, Webber has changed the face of the store, placing an increasingly strong emphasis on the retail side of the business rather than the practical side – an anecdote that has worked so far despite the golf retail market’s constant up and downs. “I took over the business as a business man- not a golfer,” says Webber, who lives happily in Newmarket with his wife. “Before I came in, the store was run by golfers, and the business was struggling. It’s O.K to have a passion, but when it comes to business, business comes first. Then the passion.”

Now that this recession is in full-swing, market uncertainty has only increased in the golf market. Even the PGA Tour is suffering, having to drop corporate-sponsored events.


Matt Powell April 9, 2009 Magazine Production and Editing

0540421 Feature Article – Final Draft

Legends like Greg Norman have reported to outlets like ESPN that PGA Tour players should take a pay-cut as a response to the global recession. Oddly enough, Webber reports an increase in sales – but not necessarily profits. He claims to specialize in selling “last year’s” stock at discounted prices. He buys higher volumes, but makes lower profit margin because of it. The formula, however, has kept the store’s doors open, and should, he says. He says his awareness of the competition also saves him, as he makes weekly visits to Golf Town locations, the big box store that was founded in 1999 across Canada and poses as Webber’s most significant threat – especially now that there is a GT opening in Newmarket’s neighbouring town of Aurora. But, when it comes to small business, he says staying competitive with the bigger players is essential. “You shouldn’t be in business if you can’t compete,” he says. “I’d rather match Golf Town and make a little less money than be unable to match prices and lose customers – which is something a lot of small businesses forget about.”

He recalls a time when he wanted a new barbeque, going to a small shop at the end of his plaza. “I wanted to buy this beautiful Napoleon barbeque and help the guy out because Home Depot and Canadian tire were taking a lot of his business,” he says. “But, I went and explained that the competition had lower prices, and he wouldn’t match them. I left scratching my head, but realized that that side of the business is essential for me to understand and to avoid because it’s the only way I can stay competitive. People want a bargain – especially on quality golf equipment.” Coincidentally enough, as we’re sitting in his office, neatly decorated with pictures (one of Webber and PGA tour superstar Ernie Els), the phone rings. It’s Steve Levick, the store’s Titleist sales representative working a deal on discontinued drivers.


Matt Powell April 9, 2009 Magazine Production and Editing

0540421 Feature Article – Final Draft

“14 drivers? How much?,” asks Webber. “$125? O.K. Drop them off as soon as you can.”

Not every deal is as simple as that. But, this conversation shows the importance of that relationship between vendor and retailer. And, while that pending Titleist order is a good example, the store’s stock is also a good indication of just how good Webber’s relationships are with golf retail’s elite. The walk between the front door to Lee’s office is lined with a number of high-end, discounted drivers and fairway woods, while a decorative wooden fence lined with demoiron sets protects the faux-putting green. Being overly nosey, I glance over the prices and being having a pretty extensive knowledge of golf equipment, I’m shocked at some of the prices. Callaway irons with prices cut in half because they are a year old, or the 7-iron has been hit on an indoor simulator. The most obvious, though, the endless line of assorted Taylormade drivers priced as low as $150.

Now, anyone that knows anything about golf knows that Taylormade is the brand in golf equipment. Since Adidas bought the company a few years ago, an endless amount of money has been poured into R&D and club innovation – the company has released 45 drivers since 2003 (the average golf company will release one, maybe two drivers a year) according to an article in Business Week published in March. Because of that endless output of quality equipment, the company has absolutely dominated club sales and been established as the company to buy a driver from. Taylormade reported global sales increases of 6% last quarter to almost $239 million according to Business Week’s stock information. But, it also helps that the company has a seemingly endless amount of money to keep plugging golf clubs into the market.

Targetlines and Taylormade have enjoyed a close relationship throughout the years. Webber is staffed by Taylormade, and travelled to Carlsbad last year to tour the company’s head office, and hit golf balls on their on-site range with PGA Tour player Ian Leggat. And while Taylormade’s latest novelty item, the R9, was released, sales have


Matt Powell April 9, 2009 Magazine Production and Editing

0540421 Feature Article – Final Draft

been strong. The R9 retails for $500, which Webber claims is an increasingly small market. But, because of Taylormade’s supply and demand practices, Targetlines has enjoyed a number of close-out specials on high-end Taylormade product that can be sold at a much lower price.

When Taylormade introduced their R9 driver at the beginning of March, the company offered about $100 worth of golf balls with the purchase of the driver. They call the strategy “Value Added Promotions”. Taylormade territory manager, Peter Chandler, says the VPA’s are key in a recession because it’s giving something back to the customer, but also getting the Taylormade name in the market even more significantly. “The R9 is a $500 golf club – the market for that kind of purchase is very small these days,” he says. “But, by offering the customer two dozen premium Taylormade golf balls, it’s not only giving them something back for supporting our company, but it’s getting our name on the golf course even more by having a larger number of people playing our golf ball.” Titleist’s Pro V1 has dominated the golf ball market for years, every major player in the industry has pushed to get a premium golf ball on the market. Taylormade, has been the most aggressive, introducing the first ever four-piece golf ball last season, but still fell somewhat short to the Pro V1. But, the landscape of the industry has changed significantly – mergers have materialized out of nowhere, technology is being pushed harder than ever, and price point dominates marketing strategies. The most significant of these mergers, however, has been Srixon Inc’s acquisition of Cleveland Golf, who was previously owned by Quiksilver, the biggest surf-wear company in the world. Oddly enough, Cleveland held the industry’s third largest market share. The R9 is the 45th driver Taylormade has released since 2003. 45 is a number so high, that the shelf life of a Taylormade club is about six months. Other companies release, on


Matt Powell April 9, 2009 Magazine Production and Editing

0540421 Feature Article – Final Draft

average, one to two drivers a year. Taylormade currently has four drivers in stores – all at different price points. “Taylormade is the best example of product innovation by far,” says Webber. “Innovation against price point is a very important formula in the golf industry, because everyone wants the best stuff, but can’t necessarily afford it. We have a Taylormade driver priced from $150 to $500. That’s why they lead – there’s so many drivers at so many price points.”

Webber says that building relationships with vendors is how he keeps his doors open. “Taylormade, for example, always takes care of us because I’ve maintained my commitment to them by paying my bills on time and not upsetting the market by pricing product ineffectively.” The difference with Taylormade is that they’re a premium brand that has the ability to move enough inventory to discontinue product lines and sell it at discounted prices – which not every golf vendor has. The “mix”, as he calls it, is Webber’s most powerful weapon in his arsenal of promotional weapons that have kept Targetlines flourishing for so long. And with Golf Town opening in Aurora in April, the push is stronger than ever to maintain the presence and control he’s had on the community’s golf retail market for so long. “The mix is why we can compete,” he says. “Instead of having three pairs of $300 shoes, we may only have one, but we’ll have three styles of $70-$80 shoes from each company. That’s big for us because Golf Town is great at focusing on the new stuff – they have the capital to do that. We don’t necessarily have that overhead to bring mass amounts of all the new stuff in. But, we can bring, lower priced, slightly dated product in to sell at a lower price and still make a decent profit. That’s the majority of our business.”


Matt Powell April 9, 2009 Magazine Production and Editing

0540421 Feature Article – Final Draft

It’s quite obvious based on the interest of the cliental that we could easily place Targetlines’ customer profile into that weekend golfer who goes out to have fun with his buddies. Not really the guy who has the $100,000 Clublink membership who buys $4000 worth of new equipment every year. Fortunately for Webber, understanding the consumer’s budget has led to annual sales and profit increases, he says. “We survive on closeouts; overruns that I buy with options to buy more if we need them. It costs vendors money to have inventory laying around warehouses, so buying the stuff at a discounted price helps both parties out because we can both move the product.” The reality though, is that golf retail’s turnover is shockingly low. Stores have to carry large amounts of inventory to maintain the demand, but the turnover on that product may only be two or three times a year, explains Webber.

While the store is buzzing, Webber and I sheltered by the confines of his office, our conversation comes to an amicable ending. And, as the conversation ends, Webber makes a touching observation that seems the key anecdote to his success, and sums up our entire conversation. “You have to be who you are in no matter what you do,” he says. “I’m a small retailer competing in a very risky business, but I’ve made it work for 12 years now.”

Fore! Golf retail is surviving, but can it dodge obstacles for much longer?  

An article I wrote about Targetlines Golf Centre, a small golf retail story in Newmarket, ON, and the struggles they face in a shrinking mar...

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