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Long-Shot Odds Give Golf Boutiques an Incentive to Specialize

BY BRUCE KAUFFMAN

Small companies clustered here in the epicenter of the golf industry are trekking to Florida this month to show off their sports-related gear , from hand-held tools that repair delicate putting greens to stylish clothes that are worn on and off the course.

The locals are convening at the country’s largest golf merchandise show, the Professional Golfers’ Association of America’s annual merchandise event being held Jan. 25-27 in Orlando, Fla.

Far from the corporate boardrooms of venerable high-profile publicly traded companies such as Carlsbad’s Callaway Golf Co., the boutiques are fighting to find niches that no one else fills. Even in the crowded field of sports apparel, local companies are ever on the prowl for ways to look unique.

For some, this is the year of the rollout. Short Game Travel Clubs Inc. of Del Mar, for example, a producer of clubs that stow easily in airplane overhead compartments , three half-sized wedges and a putter connect with a detachable grip and fit into a 21-inch luggage case , will show off its new trademarked 4-in-One Golf System for the first time at the PGA show. The short game, as the company points out, is the most crucial in golf. “It’s not how you drive,” goes its slogan. “It’s how you arrive.”

The roster of companies with booths at the big show reflects the state of the industry in San Diego County. For every Callaway, Carlsbad-based TaylorMade Golf Co. Inc., Poway-based graphite golf shaft developer Aldila Inc. and sports apparel maker Ashworth Inc. in Carlsbad, the big companies that form the bulwark of the golf industry in the region, there are about a half-dozen relative bantams contending for attention.

And like many businesses in the region, they tend to be lean and specialized, dotting the country with independent sales representatives and using a network of manufacturers in Mexico, China and other Asian countries.

Some companies, such as Carlsbad-based golf accessory company Starting Time, have tiny payrolls; in this case, President Hugh Penton and a college student who works part time as an apprentice. Starting Time, which has specialized for five years in products such as beverage holders aimed at golfers who walk the course, now aims for everyone. The DivotMaster, a device designed to smooth out putting surfaces indented by the balls that land there, makes its debut this year.

This tool, as the sales literature states, fits securely on the end of the putter. Lightweight, it takes up little space, so the golfer always has it alongside and “can quickly make the ball mark repairs without even bending over.”

In business now for five years, Penton, whose company also features a portable device that reseeds the divots dug up by golf swings on the fairway, says 2007 looks to be the most profitable year so far for Starting Time. A good year, he said, will be defined by sales revenue of $100,000 to $200,000. “It’s a new product,” he said of the DivotMaster, “and golf is very traditional.”

Despite the fact that golf enthusiasts may “fall in love with the next magical gadget,” even the most clever of the small companies have found it hard to expand and take themselves to a “higher level,” says Terry McAndrew, a leading golf industry analyst who publishes the Phoenix-based Web Street Golf Report, a 40,000-circulation weekly.

“There’s a great division up there (in San Diego County) in the battlefield between the big guns, the big boys and everybody else,” he said in a phone interview. “I think it’s a case of the haves and the have-nots. In the case of the smaller guys, it’s a matter of trying to run uphill. It’s three times as hard for them to get noticed.”

Growth as a whole has been static, he said. There’s an oversupply of golf gear but not an oversupply of buyers. “If Callaway were coming up today like it was 25 years ago, it would cost them a lot more money to get going,” he said. “It would be a harder, more uphill battle. The odds are longer.

“The smaller companies need to have an honest chat with themselves and ask themselves, ‘What do I want to be when I grow up?’ The days of starting from scratch and then going on the New York Stock Exchange, those days just don’t seem to exist anymore.

“If the big guys are having their own challenges growing their top-line revenue, it makes you wonder about the prospects of the smaller guys. Now I don’t want to dampen the entrepreneurial spirit that’s prevalent today, but the reality of it is that it’s going to be a tough, long haul. But that doesn’t mean somebody can’t be successful.”

The San Diego boutiques appear undeterred. Generally, operating with fewer than two dozen employees and annual revenue of less than $5 million, they are tearing into the market with high hopes. One sector, clothing, is poised to cross styles worn on the golf course over into other sports and into everyday life as well.

A group of top-flight golfers, some of whom are also active as agents for athletes, sells clothing that people wear to dinner, away from the country club, after they’ve putted out on the 18th hole.

Pahr 72 Fairway Essentials, with an address on Loker Avenue in Carlsbad, has become synonymous with authentic and plugged-in golf entrepreneurship. The Pahr startup just won official approval to sell its products to the crowds at next year’s prestigious U.S. Open Championship tournament at Torrey Pines Golf Course in La Jolla.

The approval lends the 1-year-old company authenticity, said Pahr 72 Vice President Andy Gilkison, a Chicagoan who first came to California two decades ago to attend college at Cal Poly San Luis Obispo. The company plans to garner even more cache by persuading athletes to wear the clothing even in the absence of lucrative endorsement deals.

“We understand the fact that you can’t just walk into the apparel business and expect to be successful right off,” said Gilkison, noting that the company thinks that golf clothing will someday be driving fashion in the entire sports world.

Pahr 72 in February is set to ship some two dozen styles of shirts, shorts and pants for the first time to golf specialty stores and pro shops. Gilkison said the company expects that revenues in 2007 will be around $1.5 million and, with the help of orders from corporations for clothing with corporate logos, grow to at least $5 million in three years.

A Loker Avenue neighbor, the 10-year-old San Diego Hat Co., also directs its appeal to those who are off the golf course, though a target market is golfers seeking protection from the sun’s ultraviolet rays with tightly woven, scientifically tested hats and visors. A staple is a visor that rolls up to fit in a pocket or purse and keeps its shape with plastic-covered wires built into the bill.

Company officials say they’ll be making a special appeal to women golfers at the PGA show with fashionable headwear in a variety of colors.

With 21 employees and $7 million in sales for 2006, San Diego Hat started as a collaboration between two friends, Teresa Gardner and Andrew Bleecher, surfers who financed their travels in search of perfect waves in the early 1990s by bringing home products from indigenous craftspeople to sell. The crocheted hats made by a group of women in Bali took off. They are sold under the Silverwave label. About a third of all the different hats produced today go to the golf market.


Bruce Kauffman is a freelance writer based in Oceanside.

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