Tee Times Article: A Golf Cart Isn’t Just for Golf Anymore
August 22, 2008
Golf, or a game similar to golf was first played by the Dutch in 1297, but it wasn’t until the late 1940s that the first golf cart rolled across the links. Before WWII, golfers had to either have a caddie carry their clubs or shoulder the burden themselves and drag them to the next hole. Anyone who has played on a hot Minnesota afternoon in August is reminded why the golf cart was invented.
The first golf carts were gas powered and made for people with disabilities. Then in 1951, Merle Williams founded his Marketeer Company to produce electric golf carts in 1951. Very quickly, competitors began the production of competing electric golf carts; LEKTRO and E-Z-GO in 1954, Cushman in 1955, Club Car in 1958 and even Harley-Davidson got in the game in 1963. I wonder what those carts sounded like?
Some of the firms that began in the industry forty years ago are still around; namely Club Car (owned by Ingersoll Rand) and E-Z-GO (owned by Textron since 1961). In Minnesota, Versatile Vehicles based in Savage, is one of the nation’s largest distributors of E-Z-GO golf cars in the nation.
Founded in 1985 by Mike and Stan Malone, Versatile Vehicles always knew that just selling to golf courses couldn’t sustain the business. So in 1997, the Malone’s sold a 50% interest to Gabby Accad, at the time their general manager. Mike Malone then started to focus his energy on building the Ridges at Sand Creek Golf Course in Jordan, Minnesota and Gabby Accad became the company’s new president and turned his attention to growing the golf cart business. His efforts have paid off nicely.
“When I first started in the business, golf cars were thought to only be for a golf course. Today, our customers use our golf cars for business, the cabin or as personnel carriers. Eighty percent of our retail sales are for non-golf uses like shopping centers, schools, apartment complexes, the DNR and even sports teams like the Minnesota Vikings use an E-Z-GO,” says Accad.
Working with industry leading E-Z-GO has been beneficial to Versatile Vehicles because in 2005, when E-Z-GO decided to close its factory store and service center, they sold the territory to Versatile. Now the company is both a distributor and dealer for the entire state of Minnesota, North Dakota and Western Wisconsin and has locations in Savage and Brainerd.
As the largest manufacturer in the industry, E-Z-GO is also the most innovative. There are now 45 different models available, from the traditional golf cart to people movers and utility cars, industrial vehicles that can carry up to 3,000 pounds and food service carts with built-in coolers. When asked what is the most popular model sold by Versatile Vehicles, Accad said “we have the most requests for a modified golf car where we remove the golf bag rack and add two more seats. It makes a very cost-effective mode of transportation.”
When Gabby Accad first joined the company, a golf cart was just a golf cart. Today they have moved from the golf course into the mainstream. Ever since the National Highway Traffic Safety administration allowed low speed vehicles such as golf carts, to travel up to 25 mph on roads with speed limits up to 35 mph in 1998, golf carts have been slowly moving off the golf course and into people’s garages, with sales to individuals growing each year.
“Increasingly, people are using an E-Z-GO golf cart as a replacement for their second car. We are finding that short trips to the store or working around the house is a perfect use for an electric golf car. A new golf car doesn’t use any gas so it makes it very cost-effective to operate,” says Accad.
If you are in the market for a golf cart, used ones can be found for as little as $1500 while a new one starts around $4500. The batteries last 4-7 years, get 5-15 miles on a single charge and require very little maintenance. Those found on golf courses have a top speed of 14 ½ MPH, while those suited for driving on city streets, typically race along at 25 MPH, but do require an additional investment to make them legal. You will need to add seat belts, safety glass and a license before you hit the road.
When asked what has made Versatile Vehicles successful, like a proud papa Accad says “I know it sounds like a cliché’, but the real reason I think that we’ve been so successful is our employees. They really care about satisfying the customer. It’s what has worked for us for more than twenty years and we’re not going to stop now.”
In today’s challenging economic times, maybe we don’t need to buy that fancy new Toyota Prius Hybrid just to go to the store. A $5000 E-Z-GO golf cart may do the job just as well thank you.
I’ve been a contributing writer for the Minnesota-based publication Tee Times Minnesota Golf & Living magazine. www.teetimespress.com. This article appeared in the June, 2008 issue.
What is Callaway Doing Right?
May 13, 2008
It seems that everywhere you look, golf retailing stinks. Pure plays like Golf Galaxy and Golfsmith are sucking wind big time with no end in sight. Yet, Callaway, the venerable equipment leader, is doing quite well thank you very much. Why?
Unlike Golf Galaxy and Golfsmith who are only located in the United States market, Callaway is an international brand and can shift their marketing focus to countries that are growing like Korea, Japan and China. They can also benefit from currency exchange rates. Things don’t seem to be looking up for Golf Galaxy and Golfsmith, but it does for Callaway. Here are the most recent quarterly results (April/May) for each company:
Dicks/Golf Galaxy — Comparable store sales for Golf Galaxy on a 13-week to 13-week proforma basis decreased 8.8 percent, or 9.8 percent after adjusting for the shifted retail calendar. In contrast, the parent, Pittsburgh-based retailer Dicks Sporting Goods reported net sales of $3.89 billion, up 25 percent from $3.11 billion the previous year. Net income increased to $155 million compared with $112.6 million a year ago.
Golfsmith — For the quarter ended March 29, the company lost $5.4 million , or 34 cents per share, compared with a loss of $4.9 million, or 31 cents per share, a year ago. Revenue grew 2 percent to $79.2 million from $77.7 million, in the year-ago period. Golfsmith said its results came in below its expectations due in part to a decline in rounds played and the challenging economic environment.
Callaway Golf — Callaway Golf posted quarterly earnings that beat Wall Street estimates and said it now sees full-year profits at the low end of its previously forecast range. The company, which has been cutting costs and making its operations more efficient, said first-quarter net income grew to $39.7 million, or 61 cents per share, from $32.8 million, or 48 cents per share, a year earlier. Revenue for the quarter was $366.5 million, up nearly 10 percent. Among other things, Callaway said revenue got a boost from foreign currency exchange rates.
ClubMaxx Golf Bags Interview
April 21, 2008
Scott Gordon, President
www.clubmaxxgolfbags.com
Clubmaxx Golf Bags was started in 1998 to produce high-quality golf bags systems. Their precision club handling system (PCH) is the latest and most functional club management system in golf today. Unlike typical organizer bags and accessories, the PCH System is designed to control the whole club, not just the head or shaft. Its precision club handling structure holds the each club in place preventing interaction of the clubs both inside or outside the bag.
Click the play button below to listen to the interview.
The Fallacy of Club Adjustability
February 26, 2008
I commend the big brands in finding new ways to pick the pockets of the average golfer.
In 2007, the USGA, decided to establish a new rule on club adjustability It allows for woods and irons to be developed with interchangeable heads, variable shafts and even customizable lengths, lofts and weights. If you read the trade ads you’d think just by buying one of these fancy new adjustable clubs, your score will drop by 10 strokes. Nonsense.
Yet that is basically what the TaylorMades, Nikes and Nickent Golfs are saying: buy this over-priced, over-hyped, adjustable golf club with a patented new connector that lets you pull out one shaft and replace it with another and presto, you’re on your way to becoming a scratch golfer.
On the surface this might seem like a great idea until you check out the price tag for this new fangled technology. It wasn’t enough to make us buy the latest TaylorMade r7 or Callaway FT-i driver for $599. No sir, now, to get this latest technological leap forward into our bags we must cough up $1000 for TaylorMade’s “Tour Van in a Box” that contains a driver head and three graphite shafts.
Yet it doesn’t end there.
To make sure that we’d never put a non-TaylorMade shaft into their fancy head, a proprietary connector is needed. This will assure that you only buy the expensive shafts from the company even though you could buy the same shaft, without the connector, for less. Even if we did end up buying one of these fancy drivers, we still couldn’t swap out the shaft in the middle of a round. No no that would be illegal. That can only occur between rounds.
Every year the equipment manufacturers look for new ways to separate golfers from their money and we oblige them by purchasing billions of dollars of new equipment annually. This year’s technological leap du jour is adjustable shafts. If you remember last year’s flavor it was adjustable weights. Next year maybe they will let us use those laser-guided putters.
Frank Thomas, the inventor of the graphite shaft and the GOLF CHANNEL’s Chief Technical Advisor weighed in a few weeks ago “I don’t think the USGA has thought this out to the extent it should have and instead jumped on something, which in the short term is going to please the manufacturers who are looking for something to stimulate their lagging sales.”
I’ll say this again like I’ve said it so many times in the past: take that $1000 and buy yourself some lessons or get your clubs custom fit. These options are much more likely to lower your score than a fancy adjustable-shafted driver.
The Idiocy of Movable Weights and Draw Drivers
April 15, 2007
On the Chinese calendar, 2007 is the Year of the Pig, but in golf, it is the year of the Draw. The first major equipment company to the “Draw-ing” table was TaylorMade with their r7 Draw. Then Callaway added to their FT line and its innovative square head, but couldn’t help themselves and now offers a FT-5 in three flavors: draw, neutral and fade.
In 2004-06, we saw the introduction of moveable weight drivers. Then they expanded the concept to irons, hybrids and putters. Now we can move weight around on everything in our bag except maybe our ball retriever.
Lately, to gain a market edge, TaylorMade and Callaway have been trying to undermine each other’s credibility in the media. Creating a controversy of moveable weights versus square heads. This public fight may be good for equipment sales, but it does nothing for the average golfer. Neither of these product innovations will improve a 15-handicapper’s game.
You have just blasphemed!! May the legal departments of these companies smite you.**
Not hardly. Changing the configuration of your driver by throwing weight around a club is not going to make a difference to any golfer unless we have a REPEATABLE SWING. If we can’t do the same thing two consecutive times, what difference does it make if we can put weight in the toe, heel or anywhere else?
Every golfer wants to improve their game. It’s one of those great truths in the universe. Short of outright cheating (a little rule-bending is okay), we are all looking for the next golf magazine tip or Zen moment when everything is right with the golfing world and we shoot that elusive par round.
We are being taken for an expensive ride my friends. Buying that $499 driver isn’t going to mean a hill of beans to your game if you can’t do the same thing twice. Save your money and buy some lessons. That and your old trusty 360cc driver will help lower your score faster than any of the fancy new drivers on the market today.
**Insert “cover-your-ass” legal babble here.
What is 2nd Swing Up to Now!!!
March 29, 2007
Like the Phoenix rising from the ashes, 2nd Swing is back in business. According to a feature story in my local paper Star Tribune, the new 2nd Swing has got one store open in Minneapolis and a second is slated to open in Minnetonka on April 2nd.
Before the internet, eBay and sites like www.callawaypreowned.com, 2nd Swing had a lock on the used golf equipment market. But it didn’t last long. To keep ahead, 2nd Swing added new equipment to it offerings and expanded like mad until it had opened more than 50 stores. As quickly as it grew, it also added debt at an alarming rate. By the summer of 2006, the chain was gone. A victim of overzealous expansion and $10 million in debt.
According to the article, founder Simon Kallal is back in the saddle again as well as much of his original management “Kallal and a group of five other investors stepped in earlier this year and bought 2nd Swing’s intellectual rights for $50,000. The purchase gave them the right to use 2nd Swing’s name, logo, website, software and customer database consisting of more than 250,000 names.”
As well as wash its hands of any misdeeds, missteps or screw ups by previous management.
I wrote a posting in early September that the company had been liquidated and 17,700 customers with credit balances got screwed. Well, things haven’t changed. If you check the website www.2ndswing.com, they already have a disclaimer that says “If you are seeking information regarding the old 2nd Swing, including credit or gift card balance redemption, please seek claims through the bankruptcy court. All balances were handled through the closing of the company. Zero balances were transferred to the new 2nd Swing.”
Let’s do some math. If we make the assumption that the average credit balance was only $50, then 2nd Swing was able to dump $885,000 worth of credits for only $50K ($50/customer X 17,700/customers = $885,000).
Meaning, tough luck Mr. Former Customer.
Although they have modest goals this time around, I don’t believe that the new 2nd Swing has any more chance of being successful as did the old one. The company is going back into the used golf equipment market when the market stinks. Real growth in golf equipment hasn’t occurred for six years and doesn’t look to do so very soon.
One of the chain’s former rivals, Golf Galaxy, was quoted in the Star Tribune article as saying “the pie isn’t any bigger than it was a year ago,” said Randy Zanatta, chief executive of Golf Galaxy. “It’s all a market-share game, now. It’s about how big of a slice you can get.” Now owned by Dick’s Sporting Goods, in 2003 Golf Galaxy sold almost no used clubs. Now they represent 7 to 8 percent of the chain’s overall business.
In addition, the threat of used equipment showing up on eBay and all over the Internet is very real. One online retailer I spoke with said that he buys directly from Titleist, TaylorMade and others and sees new equipment show up on eBay at retail for less than he pays for it at wholesale. Also, online websites like those operated by Callaway and others sell used or refurbished equipment, thereby competing with companies like 2nd Swing. When they first opened in 1996, none of these competitive factors existed. Today, all of them combine to make this a much different market than before.
For a paltry $50K, 2nd Swing gets to rise again and hopefully, not get themselves into the same mess as before. I remain a big skeptic.
Turning Back the Clock to Hickory Shafted Golf Clubs
February 27, 2007
Modern golf equipment has experienced a constant technological march forward. More distance, more power, more accuracy. With 460cc titanium drivers, cavity back irons, space age graphite shafts and high tech putters, golfers are constantly searching for the Holy Grail of equipment.
At the same time, there seems to be a movement away from scoring low with the latest equipment, to the more ethereal 1920s when mashies, guttta-percha balls and cool clothes were all the rage. Players are donning knickers, finding hickory shafted collectibles and entering tournaments like the 3rd Annual World Hickory Open at Craigielaw Golf Club in Aberlady, Scotland and the 10th Annual National Hickory Championship at Oakhurst Links in West Virginia.
Yet, finding authentic 1920s-era equipment and using it on the course requires scouring antique shops, flea markets and grandpa’s attic and that doesn’t guarantee you’ll find anything worth playing with. For those ready to go all out for a complete set of “retro” clubs you can pick up a circa 1930 Bobby Jones Replica Set offered by Golf Links for a mere $3995.
A new company, hoping to take advantage of the surge in “retro” golf is Sweet Wood Golf Company based in Maryland. They have introduced their first hickory shafted putters called “Brunette”, “Red Head” and “Blonde”, not because they have pictures of women on the soleplate, but because of the stain color on the hickory used in their shafts. They expect this line to retail for $135. A bargain in comparison to some of the fancy high tech putters currently on the market.
Since 1974 there has really only been one company that dominates the “semi-retro” space in golf equipment and that is Louisville Golf. They have been making persimmon drivers and putters all that time and have seen the ups and downs of being a unique golf club manufacturer, but they only take the “retro” movement so far. Their heads are wood, but their shafts are modern steel and graphite. Their prices are modern too.
Another option might be playing with irons fitted with hickory shafts. Sweet Wood Golf Company expects to introduce their Modern-Day Hickory Irons that will have 8210 soft carbon steel iron heads, modern loft/lie angles, USA turned hickory shafts and PGA Tour certified slip on leather grips for the expected market price of around $1800.
It remains to be seen if hickory-shafted golf clubs take off, but if you are a “retro” fan and think that the authenticity of the equipment you play is as important as the game, then modern day golf equipment has nothing over niblicks, brassies and hickory shafts.
Why Do I Care What Bag the Pros Play?
February 15, 2007
I got my daily e-mail from Golf Press Association. It is basically a regurgitation of the press releases they receive from equipment, apparel and marketing companies. I accept that. Sometimes these e-mails even contain some interesting announcements.
What I don’t get is why I would care that in the recent AT&T Pebble Beach National Pro-Am, “6 of the 20 finishers at the AT&T Pebble Beach National Pro-Am, including the runner up relied on Izzo to carry their bags”. Izzo is a great golf bag. They come up with innovative designs, cool colors and have bags that are easy on the back. That’s not my issue. Aside from the fact that it was a caddie that actually carried an Izzo bag for his pro, I wasn’t aware that the bag that I put my clubs in is going to make me successful.
Is this a case of “the clothes make the man” or maybe a Venn diagram problem that we learned in math class: if everyone in my group has an Izzo bag, Izzo bags are cool, then that must mean that I’m cool because I carry an Izzo bag. I think this is a not so veiled attempted to generate publicity about a product that has absolutely nothing to do with success on the golf course.
Just another example at trying to garner some press exposure when you really don’t have something worthwhile to say.
Dick’s Buys Golf Galaxy. Let the Consolidation Begin.
December 7, 2006
I had written in April that Dick’s had opened a prototype concept store called simply The Golf Shop. Now, it appears that Dick’s didn’t want to wait to see how it would perform. Instead they went out and bought Golf Galaxy for $225 million.
According to Edward W. Stack, chairman and CEO of Dick’s, he believes that the industry is ripe for consolidation, that’s why they swooped in and grabbed Golf Galaxy. With a sluggish industry firmly in a recession, some analysts wonder why Dick’s is willing to invest so much in the golf retailing space.
Dick’s Sporting Goods, with 300 stores and over $2.5 billion in sales, can afford to pick up Golf Galaxy and add its $250 million in sales to the balance sheet. They also will have more leverage with suppliers than Golf Galaxy did. Dick’s also has its own private label products and the Ben Hogan golf line that they can add to Golf Galaxy’s offerings.
What this is going to mean to the industry is that smaller retailers like GolfUSA, Golf, Etc., Nevada Bobs and others will continue to struggle and that franchised shop in your town might close. A small chain made up of independent franchised stores cannot compete with the better funded big box players. A Golf Galaxy or Golfsmith might have a 20-30,000 square foot store while a GolfUSA might have 2500 square feet.
Yet, these companies are not the competitors that Dick’s is worried about. It’s Golfsmith. With 62 stores and a strong balance sheet coming off an IPO, Golfsmith is the only pure golf retailer that Dick’s has to worry about.
As odd as this might sound, I believe that Golfsmith is a candidate for a takeover by one of the bigger fish in the sporting goods arena. With less than $400 million in sales, it might make a nice addition to The Sports Authority and their head-to-head, dog-eat-dog competition with Dick’s Sporting Goods.
Why Are Golfers So Gullible?
November 29, 2006
Many will say that “perceived” product innovation drives the golf club market each year. Knowing that, gullible golfers still wait in line to be the first to turn over their money and buy the latest, hottest or most advanced product on the market today.
So, shouldn’t it seem ridiculous to Mr. Gullible Golfer that Callaway, the big daddy of equipment, is coming out in 2007 with another “ultimate performance driver based purely on physics?” Obviously not.
I’m not picking on Callaway specifically, but all the equipment manufacturers out there. It used to be that once a year, around October, we’d get to see the unveiling of each company’s new line of golf clubs. Now, we see the cycle repeat itself every six months.
If I may, please refer to Exhibit A: the Callaway Fusion FT-i 460cc Driver.
Now how is this one different than the others? Wow! It’s got a square rear end. And it will come out at $599. Nike is going to have one too!! Last year it was screw weights, first introduced by Taylor Made, now its square butts.
As each new driver hits the market, the manufacturer mentions all the folks that are testing it on tour. Then they talk about the “performance enhancements”, “breakthrough technology” and the “unprecendented amount of pre-orders”. In the meantime, Mr. Gulllible is salivating at the prospect of getting his hand on one of these. If someone wins with it (perhaps an Annika or Phil), then it becomes the hottest seller….for a while.
Let’s see, since 2002, Callaway has introduced the Great Big Bertha, Great Big Bertha II, Big Bertha 454, Fusion, Fusion FT-3, X 460, and now the Fusion FT-i. That’s seven new drivers in FIVE years. With an average sticker price of $399, Mr. Gullible would have needed to spend $2793 to keep up with the Jones since 2002.
That doesn’t even include the new $899 set of irons, the $179 putter, the two $149 fairway woods, a $119 hybrid or the $42 Pro V1 golf balls Mr. Gullible’s needed to keep current.
I’m not faulting Callaway. I’m faulting Mr. Gullible the consumer. Instead of actually taking lessons to improve one’s game or even playing more than twice a month, Mr. Gullible wants the club to do all the work. Just think, at $125/lesson, he could have 16 lessons with a pro and still have money left over to buy that Callaway FT-i when it shows up on eBay three months later for only $299.
Isn’t there a point when a golfer has too many clubs or are we all just gullible equipment-buying fools?
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