A Swedish Golf Investors Alert

“Bulls, Birdies, Bogeys & Bears: The Remarkable and Revealing Relationship Between Golf & Investment Markets” by Kevin Armstrong

Dagens Industri is the Wall Street Journal or Financial Times of Sweden. In the August 19, 2014 edition, Martin Blomgren does a piece on the shrinking numbers in the golf industry.

Blomgren says clubs grapple with a dwindling membership. Lower fixed revenues to cover operations being the result.
Martin then dangles a few reasons for the decline. Time of play, youngsters not interested in the game and a general lack of membership development.

Blomgren points out that Sweden is not alone on this issue. He notes that golf in the USA is in the same position. The USA suffers from dwindling numbers, lack of younger players and golf courses going out of business. Of course, the tried and true twin problems of time and cost to play are also included.

Getting to the gist of his piece, Blomgren says that this week, chances are that more companies will feel the chilly weather of golf. Aha! The market doesn’t care about Golf’s problems. It cares about those poor investors quarterly earnings.

Blomgren finishes with an assessment. Any investor in the golf related equipment companies must realize the fact that this downturn will drag out.

Fewer members playing less causes lower sales of clubs, balls and golf apparel. That adds pressure on those stock margins.

The news of dwindling play, etc. has continued for a decade. No one seems to have an answer to correct this issue short of tricks like 15″ cups, dual holes on greens and “Hack Golf.”

One possibility that Mr. Blomgren did not forward is the golf industry may be the cause of this drop in clothing and equipment sales .

In this go-go world of the 21st Century, companies no longer allow equipment to sell through. With every issue of a golf periodical, the Big Three manufacturers release some new piece of equipment. These companies’ R&D departments have unlimited budgets. It’s not hard to imagine that an average golfer’s budget for new equipment is a little less.

Inventories overload when retailers must carry the new release before the sell through of the last release. To fulfill their contract obligations retailers have no choice but to stock up.

Yes, Mr. Blomgren, golf has its problems. Investments in golf and clothing companies is not one of them. Investors in these companies already know of golf’s chilly weather forecast. After all, they’ve had a decade to read up on it.

 


The Return of Swedish Golf Online

The Majors are over. The final event of the 2014 PGA Tour Unknownis over. There’s a feeling in the air here in Sweden that says Fall is just around the corner. Who, in their right mind, would re-re-launch a golf website this time of the year?

Why, I would, of course!

Swedish Golf Online has been on the web since 2009. It has been through some changes and attitudes. None were exactly what I wanted the website to be. Finally, after much reflection, I feel Swedish Golf Online is close to what I want.

First – Swedish Golf Online has a fresh look. The web site will work on all platforms: PC, smart phones and pads.
I made a simple change to golf in Sweden and places I have a visited. Divided now into Europe, the USA and other places around the world, we will add new places as I go to experience them.

Second – Since my first visit to this country, I believe that Sweden should be and could be a destination for golf tourism. Despite the lack of enthusiasm by the Swedish golf establishment, I still do. Swedish Golf Online will be my portal to spread that word. It will give an outsider’s view of Swedish golf. That view will come from an outsider who has experienced Swedish golf himself for the last decade.

I’m proud of the accomplishments of Swedish Golf Online in the past. I hope this new look and attitude will attract more readers in the future. Golfing in Sweden is something that every golfer should experience once in their life.


Hack Golf? Don’t most of us play that, already?

Much has been written in recent years about the slow, steady decline of golf as a participant sport. The usual rationale for the lack of new participants in the game is because golf takes too much time in an era of increased competition for leisure hours and, another, is golf remains too difficult to play.

Despite technological advances that have allowed the best players to increase their distance, better equipment hasn’t done much, if anything, for most golfers, the recreational golfer.

People under 35 have spurned the game, saying not only does golf take too long to play, it is too difficult to learn and has too many tiresome rules.

In comparison, skiing, which enjoyed a resurgence amidst golf’s downturn, put together user-friendly improvements in equipment with standardized instruction to greatly accelerate the learning process. Today, a rank novice can take a single day of lessons and be skiing beginner trails from top to bottom. Not so for golf, which has done nothing to shorten its long learning process, at best, and in most cases, lasting the golfer’s entire life.

To date most industry efforts to “fix” golf have centered on faster playing alternatives to the traditional 18-hole course. As far back as 2007, Jack Nicklaus was advocating 12-hole designs as the new normal. Another PGA Tour superstar turned top designer, Greg Norman, has suggested 6-hole courses. There are other thoughts on the problem, as well.

Increasingly a victim of its own image and conservative ways, golf has lost five million players in the last decade, according to the National Golf Foundation, with 20 percent of the existing 25 million golfers apt to quit in the next few years. Sweden is no exception, losing about 15% of its golf players since 2005.

Gimme...?

Now, the group, HackGolf, backed by the deep pockets of top equipment and clothing manufacturer Taylor Made-adidias Golf, is trying to tackle the difficulty side of the equation by making golf easier.

Its website is devoted to “…making golf more fun…” and plans to “…(take) the best ideas… through real world experiments and then ramp them up as accepted. The goal is to alter the game’s reputation in order to recruit lapsed golfers and a younger demographic.

Many of golf’s leaders are so convinced the sport is in danger of following the baby boomer generation into the grave that an internal rebellion has led to alternative forms of golf with new equipment, new rules and radical changes to courses.

HackGolf recently did just that, debuting the 15-inch golf hole. Immediately following the Masters, TaylorMade sponsored golfers Sergio Garcia and Justin Rose headlined a field that tried the new concept at Georgia’s Reynolds Plantation, a Ritz-Carlton hotel and luxury resort. Offering a dinner plate sized target that should make a three putt all but impossible and dramatically increase the number of birdies, eagles and, of course, holes in one.

They installed 15-inch cups and played 9-holes, Garcia shooting 30 and Rose 33, which frankly are not especially low scores. However, it also stands to reason that since they are so much better they benefit less from the increased size than the average player would.

When HackGolf debuted the system at the Pauma Valley Country Club in San Diego, Hack Golf said that the new cups reduced the length of an 18-hole round from 4:30 to 3:45, while many golfers saw a 10-stroke improvement in scores.

No matter how many advantages the tests show, it is unlikely the USGA and R&A change the hole size anytime soon. Then again, so few recreational players closely follow the rules of golf now, that the official version hardly matters if people are having more fun.

Mark King, CEO of TaylorMade-adidas Golf

“It is clear our game needs something to recapture the incredible growth and momentum we were experiencing a decade ago,” said Mark King, CEO of TaylorMade-adidas Golf, via a press release. “Whether it is this 15-inch-cup concept or an idea that comes in from outside the industry, we need to spark a revolution that will bring new participants to the game.”

In Sweden, the “solution” to their shrinkage is to get the “kids” interested. Could Hack Golf be a tool? The drawback is that Sweden is so competition oriented, they will need to switch to “normal” golf eventually. Will that be easier for the golfer or difficult? What if they don’t want to switch?

Many of golf’s leaders are so convinced that golf is in danger of following the baby boomers into the grave that has led the uprising to alternative golf with new equipment, new rules and radical changes to golf courses. The goal is to alter the game’s infamy to recruit lapsed golfers and younger demographics.

Huge holes and free mulligans can’t fix that situation.