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Isles’ golf economy chipping its way back

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With one rare exception recently celebrated at Turtle Bay, the golf business in Hawaii, according to the guys who should know best, is flat. That would be up from last year, when it all but flatlined.

Bridgestone Golf held its national sales meeting last month on the North Shore. Its representatives surfed, snorkeled and "played a lot more golf" than usual at the annual meeting, national sales director Gary Gramkow said.

There was ample reason to recharge, recreate and, for the first time, bring its meeting to Hawaii, where the "direct golf economy" was $1.4 billion in 2007.

"We just had the best year our company has ever experienced," Gramkow said. "Last year was our most profitable year despite the economy."

Bridgestone is very different than most major golf distributors here. About 80 percent of its golf business is golf balls and it has introduced a series of popular ones recently, aimed at amateurs, along with an innovative ball-fitting program.

It is an aberration in a golf world gone mad — and neglected and frustrated — since the economy hit the skids two years ago. Those most invested in the game have been reminded repeatedly that it is just a game.

"One of our CEOs said something that stuck with me," recalled Chris Wright, Hawaii’s Callaway Golf distributor. "He opened a sales meeting by saying, as a company, everyone needs to remember we make things people don’t need.

"People are working 40 or 50 hours week and they get a day off and we can help them enjoy that off time."

His business was up 15 percent from a great 2007, when it all went bad near the end of 2008. That year was still decent, but last year business was down 30 percent and Wright is hardly alone.

Manufacturers have lowered prices to get business back. Callaway was offering a free video camera to people who purchased drivers. Consumers have some leverage, but are still hesitant to use it.

"Overall, business is about 15 to 20 percent better this year, but high-ticket sales are tough," Wright said. "People aren’t buying drivers and irons."

To combat that, companies are bringing out new clubs more often. Instead of introducing drivers every three or four years, it now might be every year or 18 months. Titleist will launch a new driver in November that allows golfers to adjust the lie angle and loft 16 different ways to optimize ball flight.

"Old" models are usually discounted. It has become a buyer’s market, but with people still so worried about finances, fewer want to buy. Even Bridgestone’s Gramkow calls it "very, very sluggish." Golfers lately are more likely to change their shafts, get their clubs re-gripped or trade them in before considering new clubs. Facilities put off replacing carts and rental clubs.

The critical number for distributors is rounds played, which affects every aspect of the business from apparel to "ball consumption" to putter sales. Rounds remain relatively flat. Along with the economy, one of the worst springs weather-wise on the mainland hurt and so did Tiger Woods’ troubles. Hawaii has lost its LPGA events and a Champions Tour stop in the last few years, hurting one of the sport’s best marketing tools and further eroding local business.

Some see a flicker of optimism. Corporate travel appears to be coming back, slowly. Hotel rates are lower and those coming in are not spending as much, but at least the bodies that swing clubs, wear golf clothes and buy golf omiyage are on the way back.

"Everyone saw a noticeable decline since the end of 2008," said Nike’s Jay Hinazumi. "In my mind I think it has bottomed out and we’re seeing signs of some comeback. It’s not to where it was before the start of the so-called recession."

It is also not where it was a year ago, when the neighbor islands, especially, were hurting.

"It’s not large numbers like before, but people are coming back," Titleist’s Neal Takara says. "Last year the trend was cancel, cancel. Now they are coming back and it’s a very positive sign."

Eric Yasunaga of TaylorMade-adidas admits the "world recession had a tremendous effect" on his business since last year. The popularity of his drivers, in particular, have kept his business "resilient."

And "resiliency" is the new "success" at times like these.


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