Dean Klatt is the founding director of Country Kildare-based Phoenix Brands, and here he talks exclusively to GOLF RETAILING about the evolution of the company and why he believes the future of golf bags is Ogio
Phoenix Brands was established in 2009. How has the company evolved over the past five years?
My background is as a distributor first and foremost, and that was where we started in 2009 with Nickent. I was fortunate to have run a successful distribution business in Australia for many years, so the reputation and contacts I’d developed in the US over that time helped to find brand partners for the UK operation.
The biggest difficulty for any independent, either distributor or sales agent, is finding strong brands to work with, and that proved to be the challenge for us. Nickent was our first foray into the market, and while initially well received, they flamed out in the US, entered receivership and the writing was on the wall after that. Kikkor presented an opportunity to get into the crossover footwear business before it existed, and you could just see the potential in the category. Kikkor also had an interesting business model, focused mainly online with great use of social media, so for a traditional distributor like myself, it was a great brand from which to learn how all that stuff works.
Ogio was next to come online and that has been a dream to work with. A great brand, well received in the market and really going places. It’s opened a lot of doors with buying groups and large retailers that I haven’t been exposed to previously so it’s really got the company (and myself) into the UK trade proper. We were kind of on the periphery before that.
Well, the brand’s been through a fairly major turn-around really, and it’s an interesting case study. I would say about four to five years ago there was a swing away from the brand’s core values and more towards competing on price and chasing volume. This led to quality issues and a general decline in revenues for marketing and product development.
Fortunately, a new management team was then appointed and the work began to re-build the brand. The guys quickly analysed that the golf bag category was lacking product development and innovation. Even today, most of the bags bar Ogio and say, Sun Mountain, are all very similar in style and design, hence creating the price pressure I mentioned earlier.
It is innovation that drives the market, and Ogio is now bringing that to the table in spades. Chamber, Gotham and Silencer are just three examples of that; there is nothing like them on the market and the focus on the idea of designer collections also gets the bags away from the traditional blacks and blues. The theory is that golfers don’t mind spending on better quality equipment that will help their game, and they are looking for an alternative to the norm. This has been borne out by Ogio’s sales growth, in golf and every other category they compete in. It’s been so successful that Ogio has branched out into areas such as apparel and footwear which actually helps bags sales as well. There are now four Ogio tour players every week on the PGA Tour and this provides great exposure for the brand.
When did Ogio product arrive in the UK market through Phoenix, and how are sales so far?
We started in April 2013 and had the job of picking up the pieces from Golfsmith. There was a lot of legacy stock issues that needed to be dealt with and we also wanted to establish a controlled distribution strategy. By that I mean the change in distributorship provided a unique opportunity to find the right group of retailers to partner with, and to provide a workable and rewarding environment for that to happen. 2014 has been good, and 2015 is looking very strong. It’s a process, and takes time but we are ahead of where I’d thought we’d be.
As a premium brand – the Gotham bag retails for £249 – is it quality of accounts you are looking for, rather than quantity?
Personally, I believe the bag market has been lacking innovation and that’s caused pressure on achievable retail prices. Price becomes the number one issue as there’s very little to differentiate products from each other. A lot of retailers we spoke to initially said ‘I can’t sell a bag for over £100’. My argument has always been that consumers are smart, and if the products you offer are all of a similar style and feature level, then obviously price becomes the determining factor. Ogio has gone in the opposite direction, bringing innovation and design to the category. You could add style in there as well, which is not to be underestimated. Not everyone wants to carry around the same thing. If you can do all that with a quality product, then you can achieve the higher price points and it makes an attractive retail proposition for all types of retailer.
It’s an interesting one, as we still hear retailers saying ‘I’ll never sell a bag at £245’, yet the biggest selling models in the Ogio line are our most expensive; Chamber, Aquatech and Grom as examples. Gotham looks like being even bigger again. We’ve seen this before with brands like Galvin Green, Ecco and even Clickgear, who bring innovation and quality to an otherwise stagnant category and are able to achieve higher retail price points. Experience shows that consumers are open to varying price points, as long as it’s warranted. The retailers that recognise this are those we like working with.
Where is Ogio retailing in the UK at the moment?
We’re aligned with buying groups such as Foremost, Euro Select and independents such as golfonline and golfsupport etc. I think we will be in either Direct Golf or American Golf for next season also. Ogio has a real chance of redefining how retailers look at this category in the coming seasons.