Sales of golf clubs are booming and though one hardly is dependent on the other, health considerations have caused cancellation of the annual PGA Merchandise Show. Both however are driven by effects of the COVID-19 pandemic. Continue reading
In a move that surprised no one, the PGA of America and Reed Exhibitions have canceled the PGA Fashion & Demo Experience scheduled for August 18-19 at the Las Vegas’ Venetian Resort due to concerns of transmitting the CORVID-19 virus. Continue reading
Annually the golf industry gathers in Orlando for what some call the “Disney World for golf nuts,” a.k.a. the PGA Merchandise Show, truly the “Major of the Golf Business.”
Many golfers would jump at the chance to attend (who doesn’t like Disney World?) and yet don’t realize the Show has a serious purpose much less the scale of the industry, indeed its importance. In the U.S. golf has a $70 billion in economic impact, effects almost 2 million jobs and contributes more than $4 billion to charities each year. While there is certainly a “fun” aspect to the PGA Show it is above all a gathering of business people who understand the importance of education, networking and deal making.
PGA and LPGA Professionals, retail buyers and credentialed industry members attend to see and be seen while investigating thousands of products and services on display by the 1,000 vendors exhibiting in the 1 million square feet of the Orange County Convention Center.
Show week began on Tuesday January 23 with the world largest Demo Day comprised of 100 companies and 200 hitting bays spread around the 360-degree practice range of the Orange County National Golf Center. Day two saw opening of the exhibition on the Convention Center floor for the 40,000 plus attendees who took on the task of walking the almost 10 miles of aisles. They chipped and putted on artificial greens and hit the latest clubs in the 50-bay indoor Equipment Testing Center which was busy each day through close of the Show on Friday.
In addition to all the golf orientated apparel, accessories, equipment, products and services the Show is a “major” for club professionals’ continuing education. Scheduled over the four days were 109 classes with topics that ran the gamut from teaching the teachers (“Pelvic Powerhouse-Considerations of the Pelvis in the Modern Day Golf Swing”) to pro shop operations (“Mark Down and Clearance Planning”). There were presentations, meet-and-greets and panel discussions with celebrities such as Blair O’Neal, Karrie Webb, Adam Scott, Dave Stockton, John Daly, Greg Norman, David Ledbetter and Hank Haney.
The Show always is an excellent opportunity to get a “sense” for what industry insiders think of the immediate future and much can be learned by simply asking PGA and LPGA Professionals on the floor a couple of questions. “How was your business last year?” “What do you see for 2018 at your course?”
Unscientific admittedly, and probably biased since those spending the money for travel, hotel and meals are likely to be those whose shops are doing fairly well…probably turning a profit. Shops not in that category are less likely to attend.
Several of those queried said they were looking for increases in the number of rounds played and pro shop sales and almost everyone spoke of specific programs to attract more players. One private club professional said several thousand dollars was being spent to bring in new members. Programs to involve women such as nine-and-wine were often described, and many are starting or expanding group instruction sessions for juniors, women and seniors.
Technology was a common theme as pros talked about how they could take players away from competing facilities and increase soft goods sales in their own shops. Also, often mentioned were more efficient ways to manage their tee sheets and getting a grasp of the latest club technology to better fit golfers with clubs.
Asking similar questions of vendor personnel manning the exhibition booths got answers ranging from “last year was pretty good and this year looks the same” to “sales were up 15% in 2017 and we expect 15% in 2018.”
Neither manufacturers nor attendees responded with doom and gloom and certainly there were none of the negative responses heard just a few years ago.
Equipment companies, especially Acushnet and Callaway Golf which are publicly-traded, are under pressure to grow sales. However, since the equipment “pie” is not growing due to the number of golfers at best being stagnate they must differentiate their products with advancements in materials and proprietary technology. The current market will not support even incremental price increases, so two strategies have emerged to expand sales opportunities.
One, in addition to “regular-priced” clubs, is to go “up market” with higher priced models such as Callaway Golf did with the Epic Star driver by leveraging technology from their bestselling Epic driver. Priced at $700, the Epic Star is targeted at those with discretionary income and slower swing speeds which often translates into senior male golfers. Japanese brand Honma Golf, just now becoming known in America, has a similar plan for their top end premium quality BERES IS-06 driver series priced from $900 and $4,200.
Tour Edge Golf chose the opposite strategy with their Hot Launch 3 family. All are of the highest quality and design but sell for prices at the lower end of the spectrum. As an example, the HL3 driver is $190 or roughly one-third to one-half that of competitors. In putters Cleveland Golf, a sister brand to Srixon and XXIO best known for their wedges, took a similar tactic with the Huntington Beach series. Wonderful design and construction but selling for $100 in contrast with other company’s flat sticks at two, three and four times the price.
The success of one approach or both is an open question, but one thing is true for sure. Every company able to increase sales will be taking dollars from a competitor’s market share, not because more golfers are buying more clubs.
A summary of the 2018 PGA Merchandise Show would have to include what might be called cautious optimism from most of the attendees added to the fact real progress is being made in technology for equipment, teaching and club operations.
After covering the PGA Merchandise Show for more than 20 years the variety of products still amazes me and particularly the new items from the latest in tech gadgets to ways to more efficiently attach things to your golf bag.
The 64th industry-only Show concluded last Friday its three day run in the Orange County Convention Center located in suburban Orlando. As always it was preceded by the Demo Day to beat all demo days for PGA Professionals and the media at the Orange County National Golf Center’s immense range.
For the week the event that grabbed the most attention was the announcement by TaylorMade-adidas Golf CEO David Abeles just after Show doors opened the first day of the signing of Tiger Woods to an endorsement contract. It created a buzz overshadowing a later announcement by Callaway Golf that Michelle Wie had become a part of their staff.
Reed Expositions, who run the Show, have not released attendance yet but many old timers felt the numbers may have been down from the last couple of years. However, with 1 million square feet of exhibit space and 10 miles of aisles not counting the dozens of off floor meeting rooms, it’s hard to tell. What is for sure is the number of exhibitors remained approximately the same as the past three years—around 1,000—with 271 first time exhibitors. Reed said the number of PGA Professional in attendance increased three percent to more than 7,500.
This is the largest meeting of the golf industry or as they say, the “Major of the Golf Business” and this is certainly true though some well-known companies were absent, in a couple of cases conspicuously absent. Nike Golf of course was not exhibiting clubs since they have closed their club and ball business to concentrate on golf apparel but Nike apparel was a no show as well. Ben Hogan Golf, after an effort to reinvigorate the iconic brand was not present and this week declared bankruptcy.
Less surprising was the absence of PXG owned by Bob Parsons who has said publicly the buyers and PGA Professionals coming to Orlando are not the target market for his ultra-expensive clubs with a set listing at over $5,000. Also among the missing were Mizuno Golf, Bridgestone, True Temper and Aldila.
Among the major items attracting attention were drivers from Wilson Golf (Triton), Callaway (Great Big Bertha Epic), TaylorMade (M1 and M2), Cobra (King F7 and F7+) and Titleist (917 D2 and D3). New golf balls included the Callaway Chrome Soft X, TaylorMade TP5 and TP5x, Volvik S4 White, Srixon Z-Star/Z-Star XV and Titleist’s latest Pro V1 and Pro V1x.
There were 423 companies in the apparel category, a number that continues to grow along with the size of their displays. Services plus accessories seem to be about the same, perhaps with slight growth, which means the club company portion of the Show is declining since the total number of exhibitors remains the same. However, the club category includes companies from the largest multi-line manufacturers to grip, shaft and ferrule makers and one-of putter producers.
Besides the Woods/TMaG announcement often heard discussed on the floor, in the media center and after hours was the non-sale of TMaG which has been on the block since last May. Parent adidas hasn’t said a word and no buyers have been forthcoming though a rumor that Woods and Michael Jordan were interested was thoroughly discredited. With business a little better and a Tiger in the stable might adidas consider keeping the top metal wood maker?
Another oft heard comment there has been no superhot-must-have product introduced and there are a couple of reasons why. Club companies all use top flight technology already so the spread in club performance has narrowed plus restrictions on allowable performance by the USGA has definitely put a damper on innovation. But probably the biggest reason, and golf club designers have known this for some time, products were reaching both the USGA limits and limits imposed by the laws of physics. Change therefore is more incremental rather than a “breakthrough.”
Individual golfers still will gain the most benefit and better performance for them by using custom fitted clubs.
In the golf business orders are often written before the Show so the purchase cycle is not as dependent on face to face meetings as once was the case with possibly the exception of soft goods. The focus of the Show has changed to placing a major emphasis on the continuing education courses for PGA Professionals.
For most attendees though it is a worldwide and industrywide meet-and-greet with a sprinkling of deal making. Costs of attending are high, booth space is expensive and even large companies must figure how to get the most return from the expense. This is not a negative but something that needs to be continually acknowledged and improved by the PGA and Reed Expositions.
Each year at the PGA Merchandise Show with its 1,000 exhibitors and thousands of products we look for a few items to highlight for our readers. Here are a few that grabbed our attention as we walked the 10 miles of aisles in Orlando’s Orange County Convention Center. There are no clubs or balls in this listing…that will come later as we complete our testing and reviews.
Bermuda Sands—Finding good looking, reasonably priced golf shirts is sometimes difficult so take a look at Bermuda Sands, it’s a great brand to consider. For example there’s the Elite polo for $60 with a sophisticated subtle stripe, self-collar and three button placket. This one looks equally at home on or off the course.
Golf Pride–MCC ALIGN grip ($10.99) is best reminder grip we have seen. It has a raised ridge with a firmer feel flanked by channels down the back of this cord/rubber all-weather model. Though grips to facilitate proper hand position have been around for a long time the combination of the already popular MCC hybrid grip and alignment aid is a real winner.
Zero Friction—The DistancePro GPS Glove is the convenient combination of a glove which, we wear anyway, and a distance measuring device. We like the lightweight and 400 hours battery life of the GPS plus the fact the glove is one-size-fits-all. Two gloves and the DistancePro GPS unit which is switchable between the two list for $129.95.
New Balance—The NBG2004 is an athletic-style cleated golf shoe with a great look and lots of features such as two year guaranteed waterproof upper, New Balance’s proven comfortable REVLite midsole and a wider area for your toes to help with balance while swinging. Three color combinations of white/red, black/green and grey/blue available at $99.95.
SkyCaddie—At last someone has put a GPS rangefinder and shot tracking watch together with a mobile app for Bluetooth connection to your smartphone. For $349.95 the SkyCaddie LINX GT has those features plus comes preloaded with thousands of courses and, if you choose, it can use data from smart tags, one of which comes in the package.
Under Armour Sunglasses—There are hundreds of sunglasses on the market but we were drawn to the UA Igniter 2.0 which happens to have a very nice feature not found on competing brands…an adjustable nose pad. It doesn’t maybe sound like much but just a seemly small touch like that can make all the difference in fit, comfort and wearablity. Polarized, super light titanium self-adjusting frames for $144.99.
Sun Mountain—Known for their high quality, functional outerwear, golf and travel bags and push carts new for 2017 is the Speed Cart GT which folds down to only 37” x 16” x 13” at weight just over 17 pounds. The bag bracket is a new design to better hold golf stand bags plus there’s a new mobile phone slot and it comes with umbrella holder, scorecard holder and padded storage tray for $209.99.
P2 Putter Grips–Golfers talk a lot about putter grips, mostly about size or sometimes about feel, but perhaps most important is really the position of the hands in relation to the shaft. P2, based in Ireland, did lots of testing to come up with a design that forces the hands and wrists upward slightly, i.e. more arched, by positioning the shaft towards the bottom of the grip. The new Tour model ($35) is 50% lighter and the tacky feel is excellent.
ECCO-The new CAGE PRO model’s outsole doesn’t use cleats but does use their SPYDR-GRIP that takes advantage of pivot point for gripping. The BOA closure is both comfortable and helps to make for a perfect fit that helps performance. Waterproof with the textile upper bonded with a custom polyurethane. A choice of either black or white for $230.
Images courtesy of the manufacturers
At this writing we are just over two months to the opening of the 2017 PGA Merchandise Show—in fact we are within 75 days. Open only to members of the golf industry it is the most important annual meeting in the business. Next year it runs from January 24th with a Demo Day held at the Orange County National Golf Center and ends on January 27th after three days of exhibits in Orlando’s Orange County Convention Center.
In particular those making and selling golf equipment will be looking for answers to the direction that part of the industry is taking.
Changes to the equipment OEMs and retailers have been coming at a rapid pace.
Dick’s Sporting Goods (NYSE:DKS) owner of Golf Galaxy has purchased bankrupt competitor Golfsmith and will leave just 30 of the Golfsmith locations open which clearly changes big-box retailing of equipment. At the same time aggressive competitors such as PGA Tour Superstore and Worldwide Golf Shops (owners of Roger Dunn Golf, Edwin Watts Golf, The Golf Mart, Golfers’ Warehouse, Van’s Golf and Unita Golf) are working hard to increase their share of the approximately $4.0 billion U.S. market.
So one question is, how will the reduction in golf retail space with the closing of Golfsmith effect golf consumers, club OEM’s and the retailers themselves? Will the expansion in the number of locations by competitors compensate for Golfsmith’s loss and how will club pricing to golfers be affected?
Sales of clubs, balls, merchandise, greens fees, golf related travel and golf-front real estate values are all impacted by the number of golfers but with that number at best holding its own the business is not expanding.
Nike Golf’s exit from the club business has been projected to have minimal impact on the other OEMs but having said that Callaway Golf (NYSE:ELY) under CEO Chip Brewer has been very aggressive and is introducing attractive new products for the 2017 season. They reported a 6.9 percent increase in sales for the third quarter this year and project a substantial increase in earnings for the full year.
The other publically traded OEM Acushnet (NYSE:GOLF), makers of the best-selling Titleist golf balls, has just had its initial public offering of stock and said sales increased slightly (under 3 percent) in the quarter ending June 30 accompanied by increased profit. Acushnet also has a new line of drivers and fairway woods that are receiving good reviews.
The second largest OEM, after Acushnet, TaylorMade Golf is up for sale and has been for the past six months, evidentially with no takers. Owner adidas (OTC:ADDYY) said TMaG sales have been higher and for the first nine months of 2016 club and ball sales showed “double-digit increases” sales with higher profitability.
Other manufacturers such as Tour Edge Golf, Cobra Puma Golf and Srixon are also pressing to gain market share, albeit in a stagnant market, which means any increased sales will have to be at the expensive of another company rather than from market growth.
So the question is what will the future bring and the answer could be coming at the PGA Show. Not only will all of the new clubs and balls be available for evaluation but as significantly, industry insiders may be able to forecast which direction the market is moving. Millions of dollars ride on the decisions made.
The PGA of America is 100 this year and the recently completed 63rd PGA Merchandise Show in Orlando, Fla. at the Orange County Convention Center was the beginning of a centennial celebration by the organization which represents the 28,000 men and women who run golf facilities across the country.
As an industry, golf has been going through some trying times with more people leaving the game than taking it up but the declining numbers participating have not been the only challenge. Compounding the slide in participation has been the 2008 housing crisis-triggered recession. Golf travel, equipment, apparel and indeed every segment of the industry has struggled with the closing of hundreds of golf facilities well-documented in addition to an industry-wide consolidation via bankruptcies, sell outs and mergers.
However, if indications from the PGA Show can be believed, things may be getting better. This is no way an absolute and maybe only a faint glimmer but paraphrasing Winston Churchill, it may not be the beginning of the end but the end of the beginning of the industry’s recovery.
Many exhibitors, in an admittedly nonscientific survey, told this writer they were writing orders at a good rate especially in the accessory and apparel categories and more importantly, the mood on the floor was positive, a marked contrast to recent years when anything but optimism was the norm.
Attendance overall saw an increase of 3 percent from 2015 to over 42,000 industry professionals traveling from 91 countries to Orlando. The number of exhibitors was approximately the same but critically there were 284 new companies, an increase of 40 percent from the number of newbies last year. Show organizers also report more than 7,000 PGA Professionals came to see the latest in golf items and services while earning continuing education credits by attending the many seminars and presentations.
PGA Worldwide Golf Exhibitions Senior Vice President and General Manager Ed Several was quoted, “This was truly a special PGA Merchandise Show, where the golf community was able to mark the Centennial of the PGA of America and celebrate the impact PGA Professionals have had on the game. As is the tradition of the PGA Merchandise Show, the world of golf came together here in Orlando to drive forward the business of the game in a face-to-face environment. In addition to sourcing from a wide spectrum of the newest merchandise, attending PGA Professionals and golf buyers were able to personally experience the most advanced technologies in demo events, personal interaction with the game’s leaders and product designers, a sharing of best practices among colleagues and a full calendar of professional resources to impact their businesses and careers.”
Time will tell whether the golf industry is really experiencing in a turnaround or merely an upward pointing blip in a continuing downward trend.
Images courtesy of the PGA of America
“The Major of the Golf Business” is not an exaggeration as it applies to the PGA Merchandise Show held each January in Orlando, Fla. and the 63rd iteration concluding yesterday had its share of optimism and anticipation evident most years. Additionally, this year also marks the 100th anniversary of the formation of the sponsoring organization, the PGA of America.
Attendance figures were not available at this writing however long time industry members and media commented the numbers of buyers, PGA Professionals and other attendee categories seemed to be as high or higher than previous few years. It was expected over 40,000 would be present for at least one of the three days of exhibitions on the floor of Orange County Convention Center and at the Demo Day preceding. The number of companies exhibiting was approximately equal to 2015, close to 1,000. The annual Show is not open to the public.
PGA of America President Derek Sprague was quoted as saying, “We had record attendance at the Outdoor Demo Day and pre-registration for the PGA Merchandise Show was up over all categories.”
Show week kicked off with paratroopers, bagpipers and ceremonial tee shots to begin the 14th Outdoor Demo Day on Tuesday, Jan. 26, at Orange County National Golf Center in suburban Winter Garden. The 200 plus hitting bays of the circular 42-acre driving range afforded PGA Professionals and buyers the opportunity to test equipment from more than 100 companies.
The Show exhibitions began on Wed. the 27th and ran through yesterday. In addition to the newest and latest clubs, balls, apparel, accessories and dozens of other golf related items several celebrities were on hand to promote their sponsor’s products. Among the names on the floor were Lee Trevino, Johnny Miller, David Ledbetter, Martin Hall, Lexi Thompson, Bubba Watson, Stephen Bowditch, Ian Poulter, Lydia Ko, Justin Thomas and Graeme McDowall.
The question however is the same every year, what is the state of the game and particularly the health of the golf business? The answer is the obvious concern of everyone making the annual pilgrimage to Orlando.
To find an answer, consensus was impossible to determine, but two comments were heard time and again for the entire week. First was the acknowledgement the past 12 months had been tough especially for equipment companies and in fact more mergers, changes in ownership and even bankruptcies were topics of conversation. Second, and there no doubt it potentially reflects an overly optimistic viewpoint, new technology is making clubs more user-friendly and particularly technology as applied to instruction, on course applications and social interactions will continue to attract new players to the game. Heard more than once regarding some whiz-bang tech gadget or app was, “Millennials will love it!”
For the three days of exhibition the Equipment Testing Center was busy. This indoor driving range with 47 hitting stations, putting green and short game area offered thousands of possible combinations of clubheads and shafts for trial. On the increasingly important soft goods end of the Show floor, lifestyle and fitness apparel drew added attention as younger people (and some not so young) look for styles that may be worn for leisure, on-course and off-course activities. Fitness apparel for men and women also has seen increasing popularity and is being carried by golf shops.
The Professional Golfers’ Association of America marks their centennial next year and the celebration begins in January with the largest gathering of the golf industry, the PGA Merchandise Show held annually in Orlando, Fla.
The PGA, arguably the most important golf organization, has 27,000 members who are the frontline of industry interaction its customers. Teaching the golf swing, overseeing the tee sheet, selling a new set of irons, setting up tournaments and managing course personnel all are the job of a PGA Professional. Even though at times, it may seem his or her primary task is lending a sympathetic ear to the sorry state of our golf games.
The beginnings of the PGA in 1916 are interesting since a major impetus to start the organization came from the outside, from New York City department store owner and avid golfer Rodman Wanamaker. At that time all professionals were “club pros,” there was no such thing as the PGA Tour, and a large part of every club pro’s income was the sale of clubs and balls. Wannamaker felt golf equipment sales could be increased if they got together and started a professional organization. He sponsored a luncheon in January of 1916 where the idea was discussed and received general approval so that in April the PGA of America was chartered.
The rest as they say is history. The new organization was quick to create competitions for its members with the first PGA Championship played just six months later in October. Jim Barnes, future member of the World Golf Hall of Fame, was the first victor taking the winners share of the $2,580 purse put up by Wanamaker, who also paid for the trophy; the same Wanamaker Trophy still presented to the champion.
The PGA Merchandise Show began during the week of the 1954 PGA Seniors Championship in Dunedin, Fla. being played at the then PGA National Golf Club. Salesmen from several equipment and apparel companies set up in the parking lot using the trunks of their cars and folding table to display products.
In its 60 years the Show has grown to more than 1,000 exhibitors housed in one million square feet with 10 miles of exhibit aisles in Orlando’s Orange County Convention Center. Restricted to PGA professionals and members of the golf industry, attendance at the January 2015 Show topped 40,000. For many if not most PGA Professionals the dozens of professional development continuing education classes alone are sufficient reason to attend not to mention the immensely popular Demo Day held at the Orange County National Golf Center prior to Show opening.
The PGA Merchandise Show is considered mandatory by golf industry insiders both as representing the start of a new golf year and for providing the opportunity to interact with their peers and conduct business.
Images courtesy of the PGA of America