Golf club manufacturers hit the rough

UnknownONE OF GOLF’S greatest irritants is the volume of golf equipment that floods onto the market during the course of a year. Irritating for the hapless club golfer, who has no sooner decided to invest in a new, all singing, all dancing driver, when a brand new version by the same manufacturer becomes available, and irritating for the club professional and golf store left with a club that is outmoded and must immediately be offered at a substantial discount.

For all the gushing press releases there are few of the really big names in golf that aren’t struggling. Sadly, the only way some of them have to appease their share holders is to rush ever more new product onto the market.

Callaway and TaylorMade are two of the worst offenders as they chase each other for increased market share. However, the truth is fast becoming apparent that more is really much less when it comes to winning the hearts and minds of the shrinking UK and USA markets.

Callaway, of the publicly quoted companies, has turned in a decent performance after making a loss in 2013 and a small profit at the tail end of 2014. The Carlsbad, California based company had third quarter sales of $176m, a four per cent jump on 2014. Yet look how many golf clubs it released.

Over a 15 month period in the USA it has released the following drivers: The FT Optiforce that became the Bertha V series; the X2 Hot, the X2 Hot Pro: Big Bertha (replaced by Big Bertha 815); Big Bertha Alpha (replaced by Big Bertha 815 Double Black Diamond); and the Big Bertha V-series. All this against a backdrop of USA golf where 25m fewer people played golf than in 2006 against a population increase of 6%.

Worryingly, at least in the third quarter, this flood of drivers appears to have paid off for Callaway. It has not for other companies.

German sports giant Adidas is looking for a buyer for some or all of its TaylorMade brand which, between 2012 and 2014, saw an overall sales drop of 32%. In 2011 Fortune Brands sold Titleist, one of the most respected names in golf because of its dominance in the ball and footwear sector, to a group led by Fila Korea for $1.23 bn.

Initially this was seen as a similar deal to the Adidas TaylorMade acquisition whereby a recognised clothing and footwear brand moves into golf equipment. Sadly neither deal has been a success and Titleist is back on the market.

In the UK the sale of drivers declined by between 10 and 15 per cent in 2014. Tom Shine, of research company Golf Data Tech, said, ‘The wood is the high end category, that typically deals with distance, always an important word to any golfer. Having it down as much as it is, is disturbing.’

For the consumer the current retail scene in golf is as confusing as it is disturbing. Do we buy something now in the almost certain knowledge that a new line is only around the corner or do we wait and see what discounts are available when the club we are looking at      is rendered out dated by a new arrival?

And when we attend demonstration days that the big name manufacturers are so keen on us attending is what we are being offered really the best for us? Or are they simply trying to shift last year’s stock?

 

 

 

 

 

 

 

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