polo sports shirts Wilson swinging for a slice of Nike golf equipment business
When Nike announced plans to exit the golf equipment business last month, Wilson Sporting Goods saw a chance to line up a shot to the green.
“The Nexit, as we call it, is a huge opportunity for us,” said Wilson Golf President Tim Clarke. “It’s full steam ahead.”
Nike’s decision to focus on golf shoes and apparel came months after Adidas said it wanted to do the same and also sell its golf equipment brands, including TaylorMade. Wilson, however, is as committed as ever to sales of irons, drivers and balls.
That might come as a surprise to golfers who know Chicago based Wilson as the brand that went from industry leader through the mid 1980s to losses and a reputation for bargain box sets. market for golf balls and the club it was best known for, irons.
The company has been mounting a decadelong turnaround push, reinvesting in research and development, much of which happens at the Schiller Park facility where Wilson tests and develops new products near its Chicago corporate headquarters. Wilson has been shifting focus from entry level to premium products, even developing an upcoming reality show where contestants compete to design a new Wilson driver that will be on store shelves in time for Black Friday.
Clarke said the effort is paying off, if slowly. have grown 11 percent each of the last six years. market share in irons has risen to roughly 3 percent and roughly 5 percent for golf balls, he said.
“In a business that has had some nicks in the last five years, slow and steady is winning the race, I’d say,” Clarke said.
But the company is still a small player in a market where competitors are scrapping over share of a pie that hasn’t been getting any bigger, trying to win back golfers despite a brand some still associate with big box sporting goods chains.
“Although we want to support Chicago, it comes down to what our customers want,” he said.
According to Clarke, trouble started under former parent company PepsiCo in the 1970s, when Wilson managers lacked sports backgrounds. After a sale to a private equity group in 1985, it wound up at Amer Sports, the Finnish parent company of sports brands such as Salomon, Atomic Skis and Arc’teryx, in 1989.
“The mentality came in that volume is king,” he said. But it took focus away from equipment for more serious players and hurt the brand’s image. In the early 2000s, the golf division alternated between years of profits and losses as it ran through six general managers in the decade leading up to 2006, when Clarke took the job. Net sales fell by about half between 2001 and 2006,
according to Amer’s annual reports.
“Market share was basically nonexistent, and we were pretty well out of the pro business at that point,” he said.
Wilson cut back on costs everywhere except research and development and started introducing products every two years about half as often as it had been to avoid discounting, Clarke said. Sales, also affected by the recession, kept falling, but the priority was getting back to profitability, he said.
The one PGA Tour player Wilson still sponsored, Padraig Harrington, won a trio of championships in 2007 and 2008 and gave the brand a boost, Clarke said.
Sales of softer, low compression Duo golf balls provided another. Wilson also split clubs into three categories aimed at three levels of players, but all at the premium end of the business, and began trying to shift sales upmarket.
You might not think a basketball has changed much over the years. Kevin Krysiak, 37, Wilson Sporting Goods’ global director of innovation for team sports, would beg to differ. The rest comes from equipment sold in sporting goods stores or mass market retailers. Wilson will always have entry level equipment in sporting goods stores but cut cheap versions that were hurting the brand, said Clarke. golf brands, while ranking fourth in Europe. His goal is to crack the top three and be the biggest division within Wilson Sporting Goods.
That would be easier if the golf equipment market was growing.
Golf equipment retail sales were $3.7 billion in 2015, up from $3.4 billion the year before but flat with 2013, according to the National Sporting Goods Association. participation numbers are down from a pre recession high of around 30 million to 24.1 million people who went golfing at least once last year, 19.5 million of whom were committed golfers, according to the National Golf Foundation.
Tom Stine, partner at industry research firm Golf Datatech, said the decline isn’t cause for alarm, but a return to a participation figure that’s held steady around 25 million for years except for a spike around an increase in the number of courses built tied to the housing boom.
Others question whether a complicated, expensive and slow moving game will ever catch on with a new generation of players.
“There are just so many points of the game that don’t mesh up with how millennials recreate,” said NPD Group sports industry analyst Matt Powell.
Nike is getting out of the golf equipment business, a surprising announcement Wednesday that is sure to send Tiger Woods, Rory McIlroy and other players searching for new clubs and golf balls next season.