PGA TOUR SUPERSTORES TEE UP ‘EXPERIENCE’: Nirvana for golf nuts
In its drive to open more stores and crowd out Golfsmith and pro shops, the equipment chain taps into the knowledge of former Home Depot leaders.
09/03/2008
Atlanta, GA (The Atlanta Journal-Constitution) -- PGA Tour Superstores are not going to leave growth to a stroke of luck.
The 5-year-old golf and tennis chain, with 10 stores, is teeing up for expansion. It has hired former Falcons and Home Depot marketing chief, Dick Sullivan, and is bringing Arthur Blank, co-founder of Home Depot and the Falcons owner, onto the board of directors. The fledgling golf chain wants to open another 10 stores in the next three to five years, and plans to gain market share from older rivals such as Edwin Watts and Golfsmith, plus golf and tennis pro shops.
At PGA Tour Superstores, it’s all about the experience.
Walking into one of the stores, a customer has to stay alert for swinging golf clubs.
Like a Dave & Buster’s for golfers, the golf and tennis store is an amusement park of sorts for those who want to perfect their golf game or tennis skills. At the giant “experiential” store in Duluth, there are at least a dozen places to try out the weight and feel of a No. 5 iron, practice with a pitching wedge or try out the latest “White Sharapova Limited Edition” tennis racket.
Sullivan and Blank are both part of the golf and tennis chain’s pedigree: the chain that became the PGA Tour Superstores was founded in 2004 by Bill Hamlin, a retired executive vice president of merchandising at Home Depot.
Most of the investors and board members have connections to the world’s largest home improvement chain. And the chain’s headquarters are in Atlanta. But just like Home Depot grew from its Atlanta roots, the golf and tennis superstore is ready to become a national player.
Blank said growth will be slow and steady.
The opportunity for consolidation, he said, is “tremendous.”
Blank, who also sits on the board of office supply retailer Staples, said what he brings to a board is his retail experience.
“What they often say to me [at Staples] is the fact that you’ve been there, done it, gotten the T-shirt at Home Depot, and I can bring that experience to their business.”
He said that Sullivan, as a former Home Depot merchant and pro who filled the Georgia Dome with screaming Falcons fans, “understands the dynamics of retail,” and is creative and bright.
“And on top of that he’s a pretty good golfer,” with a straight, hard, “hockeylike” swing, Blank said.
The big box golf and tennis store in Duluth —- about the size of a small Home Depot at 70,000 square feet —- is what Sullivan calls a “category killer.” It’s stocked to the brim with golf and tennis gear. Sullivan, 52, wants the store to offer the widest variety of gear at the best price, and at first glance, the selection looks exhaustive from golf shoe bags for $9.99 to pink seersucker golf shorts by Verdina for $110.
It also offers thousands of shafts for golfers to build their own clubs.
“We’re bringing pro equipment to mass golfers,” said Sullivan. “This is an experiential store. It’s all about brand and experience. Whatever you want or need, we’re going to have it in stock.”
He wants to grow the chain primarily in the Sun Belt, or areas with good golfing weather.
But with only 10 stores, PGA Tour Superstores are a drop in the bucket of the $6 billion golf market.
Rival Golfsmith, based in Austin, Texas, for example, already has 72 stores, and its leaders want to grow the chain to 250 stores. Golfsmith’s sales in 2007 were $388.2 million. Golfsmith’s revenues grew by 4 percent to $130 million in the second quarter.
PGA Tour Superstores, as a private company, does not report sales figures.
But according to J. David Cumberland, a retail analyst with Robert W. Baird & Co., it has been challenging Golfsmith in three key markets where both chains have stores, including Atlanta.
“I’m sure that at Golfsmith they’re very aware of what PGA is doing and are trying to keep up as well as they can,” said Cumberland. Golfsmith is an investment client of Baird.
Cumberland wrote in a note to investors on Aug. 6, “PGA Tour Superstore could continue to hurt comps [comparable sales] with expansion in Golfsmith’s markets.” Cumberland has said Golfsmith needs to “continue to differentiate” itself to compete with the PGA Tour stores. Golfsmith’s future may be in opening more stores like the one in Raleigh, N.C. Opened last year, the 59,000-square-foot store has more activities and practice areas.
On the other hand, Cumberland noted the relatively large size of the PGA Tour stores is a challenge for operating profitably and for finding suitable real estate.
Still, taking a swing at golf could be a good bet.
“If you’re a golf nut you immediately fall in love” with the PGA Tour Superstore, said Greg Maloney, president and CEO of Jones Lang LaSalle’s retail group, which is based in Atlanta.
Despite the flagging economy, he sees golf as a good retail opportunity. “In down times is when the real smart and real savvy” can grow, Maloney said, “because everybody else is on the sidelines. Now is absolutely the time to go and find the best deals.”
Finally, he said, “golf is expensive,” meaning golfers have to buy the clubs, balls, shoes, etc. He points to Tiger Woods as getting “millennials” into golf, or that generation of 73 million people born from 1977 to 1994.
“There’s very few good golfers,” said Sullivan smiling, picturing why his stores will always have a rapt audience.
“It’s just like being in a candy store,” said Alan Olson of Suwanee, who watched his wife, Amy, take golf lessons on a recent rainy Tuesday.
DICK SULLIVAN
President and CEO of PGA Tour Superstores, and president of Georgia Force
Age: 52
Born: Needham, Mass.
Education: Bachelor of science in accounting from Roger Williams University in Rhode Island.
Achievements: As executive vice president of the Atlanta Falcons, he helped fill the Georgia Dome with more than 12,000 fans per game and took the Georgia Force back to Gwinnett Arena last year. As senior vice president of marketing at Home Depot, Sullivan worked on sports marketing deals with the Olympics and NASCAR.
Family: Married to Marie, with three children.
Stores: 10 (four in metro Atlanta)
Top dog: Dick Sullivan, president and CEO
Board of directors:
Chairman Bill Hamlin, founder of PGA Tour Superstores and retired executive vice president of merchandising at Home Depot.
Arthur Blank, co-founder of the Home Depot and owner and CEO of the Atlanta Falcon’s and Georgia Force.
Marshall Day, founder of Day Investment Partners and former chief financial officer of Home Depot.
Mike Elliott, Noro-Moseley Partners.
Charlie Moseley, founder of Noro-Moseley Partners.
Ralph Pepper, a retired Home Depot vendor
Kim Shreckengost, chief of staff of AMB Group, parent company of the Atlanta Falcons, and former vice president of corporate affairs at Home Depot.
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