Golftech U.K are the largest independent distributor in Europe. With the company recently taking on a new brand, Andy Brown spoke to Ian Waddicar, Managing Director, to ask about the state of the European market and find out the company’s future plans.
They say that the world is getting smaller, as new technology and relatively inexpensive flights across the globe draws us closer together. It’s certainly the case that the team at Golftech are looking internationally for their business, with a focus on both traditional and emerging markets. For example, at the PGA Merchandise Show in Orlando Ian Waddicar, UK Managing Director of the UK, revealed that they received significant interest from countries such as New Zealand, Australia, Uruguay and Columbia. With just under 70 golf courses in Columbia access to this market could be a profitable one, but Europe remains the main focus of the business.
The company are actually the largest independent distributor in Europe, an impressive claim to fame. They were set up by a German called Thomas Reiter in 1988 who had previously worked with top-end brands such as Srixon and Adidas. “We do everything from providing a putting cup to a mowing machine which costs in excess of £40,000,” explains Waddicar. “It is a huge business of which about a third is retail and the business has a turnover of £60 million plus – there aren’t many brands that have that. There are almost 300 employees throughout the whole group and the warehousing facilities in Vienna are just incredible.
“We operate all across Europe and Thomas has had a different philosophy to building his brand – he works with established distributors in each territory and in the key markets of Germany, Austria, UK and Ireland it is ourselves. In terms of market share we are just short of 39 per cent in Germany and Austria, so it is very significant.”
The main three brands which Waddicar is responsible for in the UK which are applicable to pro shops are BIG MAX – actually named after Thomas’ son, Max – ZOOM golf gloves and GolfBuddy. The latter is a recent addition to the distributor’s portfolio and getting an established brand is clearly a positive, although Waddicar acknowledges that there are issues that needed to be looked at. “From our perspective, we have picked up a business that we can bolt onto ours and we have increased our business 25 per cent by taking on another brand, and an established brand. We realised early on that the biggest issue was customer service and, on some models, product quality,” he comments. “They have had a few issues but the new products that we are developing for 2017 are very strong and we will be staggering the launches of the new models so that we can have a flow of new products and also have something new to launch at Christmas, which is a good time for this market.”
The company’s head office is in Vienna and as a business with real experience of trading all over the world, Waddicar is well placed to discuss what impact Brexit has had on business so far. Unsurprisingly, it isn’t a positive one. “Brexit has had a negative impact in that we have experienced an 18 per cent increase in costs because of the exchange rate. When you are a brand that wants to maintain quality you can’t go back to the factory and ask them to take ten dollars out of the product, it just can’t happen,” he comments. “So we have passed on between 0-15 per cent cost increase to the customers, and I would say we were averaging an 8-9 per cent increase, so we have absorbed quite a bit of the extra cost in the hope that the exchange rate goes back a bit to what it was before. It doesn’t matter as much with new products, it is only where you have existing products that the price rise is visible.”
One such new product is the ZOOM glove in which the old adage of ‘one size fits all’ really does apply. The technology used in the glove means that it fits 95 per cent of hands thanks to an expansion point built in the glove, which expands depending on how large the hand is – the glove effectively moulds itself to your hand. While new technology is always exciting, for the pro there is a genuine retailing upside of this; the number of gloves they have to stock is considerably reduced. Some brands have three different sizes for juniors and women and five for men which can be logistically difficult for smaller pro shops. “With us there are just three options in sizes and then you can add to it with colour, so it is a simple process and that is why it has been very well received as we only have a 36 or 72 glove commitment,” says Waddicar. “The technology is an expansion joint, so the larger the hand the bigger the expansion. The same glove fits an XL, large and medium hand – 95 per cent of people could put the product on and it would fit them. A lot of technology has gone into this and at a retail price starting at £11.99 – even after Brexit – is good.”
A major growth area for the company has been BigMax, both in terms of trolleys and golf bags. Both these sectors are very competitive but the brand shifted 10,000 bags in the UK alone last year, a sizeable figure. The company have been producing bags for over five years and saw a 60 per cent leap in year three and, with increasing distribution, they seem likely to only grow as a player in this market. When it comes to trolleys Waddicar thinks that the inexorable drive towards lithium will actually prove a boost for push trolleys. “When it comes to electric trolleys lithium is what all the companies are pushing which means that the price points are higher – that opens up our market as we will be £200 below them in price. Previously it was £50-100, so as soon as that gap opens I think it is a bigger market for us. I think over the next few years we will see a higher percentage of people buying push trolleys as there will be a more definite choice to be made.”