Off course leaders

The biggest off course player in the market is American Golf – GOLF RETAILING caught up with the company to talk about their controversial double value trade in deal, expanding into more locations and growing the game.

Dan G

Dan Gathercole (DG), Director of Marketing and Communications:

Are their plans to expand in 2017 and open more stores? 

Dan Gathercole (DG), Director of Marketing and Communications: Yes – we have already opened up eight new stores in the last five months and it is about working with the right venues and finding the right facilities. We were at the England Golf awards and sponsored the most welcoming golf club, which is what we are all about. We have a lot of potential venues lined up over the next six months.

How would you assess the off course market?

DG: It’s positive – the latest figures from Golf Datatech shows that off course is up this year and especially in the last few months. Over the last few years we have done a lot of initiatives, such a putting more into staff training, trying to grow the game and working on our fixtures and we are starting to see them pay off and more people are visiting our stores.

You are opening more stores while Direct Golf are closing stores… 

Barry Leach (BL), interim CEO: They are going into shop in shops within Sports Direct. There is a practicality for Sports Direct as they are a big box retailer and over the years Mike Ashley has acquired some smaller specialist retailers – it can be difficult to service the stores as everything that he is geared up to do is service big box retail. Around ten years ago we had between 75-80 stores and there are 100 now so we have done well and it is a very different marketplace now compared to a decade ago. We believe that convenience is the key and golfers choose to purchase at point of use in lots of cases.

Regarding Double Value Trade In – how would you assess its impact and why did this stop? 

DG: This obviously received a lot of attention, but people forget that we have done trade in for years. The objective of the promotion was to stimulate golfers, increase participation and get people to upgrade their equipment more often and let them have that buzz you get when you have a new set of clubs. Another reason was the increase in price of new golf equipment meant there was a bigger value gap and an opportunity for pre-owned. That was a market we had never really been into – as Europe’s largest retailer we believe we should be in that market and pre owned is a growth opportunity for us. We used Double Value Trade In to stimulate the market and now we have modified it. Whenever we do anything new people get apprehensive but there is no hidden agenda. There is lots of misinformation flying around but we have done exactly what we said we would do and we are still running a trade in offer, but we have modified parts of it.

BL: I think there was some sour grapes from a few people who do have other opportunities to compete with us but have chosen instead to criticise what we are doing rather than concentrate on running their own business better.

What has been changed with the new offering? 

BL: For double value we used the US market starting price for certain products but it is different to what it is in the UK, and then we had to factor in the dollar exchange rate. It was never perfect, but it was the most consistent industry wide measure that we could use as a firm base. The experience that we have gained over the time we ran the promotion has led us to believe that we are big and strong enough to do our own version of a market price guide, so we’ll be using an AG price list.

DG: For the best value trade in offer we will have control of the pricing regarding what we take in. This is more about value, not just about price – I don’t think there’s anywhere else in the UK and Ireland where you can take in your clubs and trade them in there and then. It is about service and convenience and letting people upgrade their equipment.

BL: There’s an opportunity in the market, because people aspire to new products and we are shortcutting the process. We are launching this in April and I think it becomes part of our fundamental proposition – as Dan said before there is a large pre owned market and we think we should be commanding a third of that market.

The company are running more free Golf shows in 2017, what is the thinking behind that? 

DG: We have one in London Excel arena over the Masters weekend, one in Manchester in April and then two in European Tour venues; one at the Scottish Open and the British Masters. The Golf Show is by American Golf, the European Tour and Sky Sports – it is a joint initiative by all three companies coming together to try and get more people hitting golf balls, interacting and engaging with golf and ultimately getting them onto the golf course and making it more accessible.

BL: We do realise that the shows aren’t necessarily forcing people to come into our stores, we are very prepared to help grow the game even through it will drive some people to shop with their local pro. We don’t mind that because long as we take our fair market share we are happy.

DG: If you look at all the stats then the market is pretty flat so the only way we are going to grow at the rate that we want to grow is by growing the market, and getting more people playing and into more golf clubs.

What’s the long term goal for AG? More stores on golf courses? 

DG: More stores that are right for us and, to be fair, a lot of them recently have been on golf courses. We actually get a lot of golf clubs coming to us and we have a large list of golf clubs that are interested in us taking over their retail. We are approached by the owners, managers and sometimes the pros of the clubs.

BL: We have certain criteria that they need to tick; they need to be accessible, family-friendly, multi-faceted facilities. The private members clubs that have a lock on the entrance don’t tend to lend themselves very well to what we are trying to achieve. We want to encourage participation and make golf more family-friendly. Some owners realise that they can make money on certain things such as food and beverage and teaching but if they don’t make a lot on retail, or even lose money, we are saying there can be a benefit for both sides and we will run the retail and share some of the revenue.

AG