Global Golf Post - January 25, 2010

No one will be popping cham-
pagne corks at the 2010 PGA Mer-
chandise Show in Orlando this week.
But the major equipment makers do
have reason to smile a bit.
For one thing, they have just
weathered the worst business year in
memory, a time when global econo-
mies tanked, stock markets were
uncertain and consumers and compa-
nies alike stopped spending. And
there is an overall belief that things
will be better in 2010 and beyond.
To be sure, that feeling is accom-
panied by caution and concern about
how tenuous the recovery seems to
be in some areas, and how the golf
industry is only three-quarters its size
of a decade ago. Analysts also fret
about further shakeouts among less
healthy operations and the difficulty
of igniting enthusiasm among con-
sumers when regulatory constraints
make it tougher to produce the sorts
of technological breakthroughs that
spike equipment sales. But none of
those factors appear to be stifling
the sense that the business climate is
indeed improving.
“I think people are feeling bet-
ter, and I believe things are getting
better,” says Scott Hennessy, chief
executive officer of leading shaft
maker True Temper Sports. “We are
going to have our best January and
February in company history. The
foundries are running seven days
a week in China again, and we are
seeing dramatic improvement in the
Asia market, and to some extent in
Europe and the U.S. things are get-
ting back to normal.

“The good companies also looked
for ways to anticipate what was coming
so they could right-size their cost struc-
tures,” says Hennessy. “At the same
time, they realized that while consum-
ers were not shopping anymore, the
companies had to continue to work
on new, innovative products and be
ready to fill the
distribution pipe-
line when things
improved.”
According to
many insiders, the
time has come to
begin filling those
pipelines.
“Of course,
companies are going to have to main-
tain the fiscal restraints they had to
put in place,” says Tom Stine, a found-
er of the Florida-based Golf Datatech
research and consulting firm. “But it
is understandable why they see bright
spots ahead. Remember, sales were
off in both 2008 and 2009, which
indicates that there is some pent-up
demand. Data shows that golfers kept
playing through the tough times. But
it has been a while since many of them
bought a new driver or a set of irons.”
Alexander feels the same way.
“Things have to get better because
the retail distribution channels
cannot take inventory down any
further,” he says. “In addition, con-
sumer confidence is on the rise.”
As a result, confidence is rising
among the major equipment makers.

Wally Uihlein
Chip Brewer, CEO of Adams Golf.
“Bookings are good, retailer trends
are moving in the right direction and
we are cautiously working our way
into a little bit of an expansion mode.
We believe growth is coming.”
So does Wally Uihlein, CEO of the
Acushnet Co., which owns the Titleist,
FootJoy and Cobra brands. He sees
2010 as the beginning of a growth
period for golf equipment makers.
“With initiatives such as Get Golf
Ready . . . the globalization of the
professional game, the popularity of
golf in countries like Japan and Korea,
the emerging middle classes in China
and India and the anticipation of golf
as an Olympic sport in 2016, these are
indeed times of opportunity,” he says.
“Companies who took the initiative to
right size the past 12 to 24 months are
in a unique position to take advantage
of this next wave of growth.”
To do that, Acushnet is implement-
ing plans to aggressively increase the
number of sales representatives it has
on the ground in mature, growing
and emerging markets. It is also look-
ing to make investments in ball and
clubfitting in the 25 to 30 largest golf
country markets, and staff stand-alone
performance and fitting centers and
an army of mobile fitting vans. The
goal is to double sales over the next
five to seven years.
Acushnet, it appears, is not only
optimistic about 2010 but also the
years ahead. Other equipment makers
are, too. Which means they may also
be smiling at next year’s Show. l