State

Big trends work against golf store owner

Between the big-box stores selling last year's technology at a discount, and the Internet selling the latest and greatest golf clubs, also at a discount, the store with "discount" built into its name didn't have a fighting chance.

After 15 years on Sisk Road as Modesto's only stand-alone golf store, International Discount Golf closed its doors in late January.

The recession was a factor, as was Stanislaus County's home foreclosure rate, and owner Ken Schaefer checks "all of the above" when listing the reasons for having to get out of the golf business.

"Golf was growing 15 years ago," said Schaefer, 44. "It was at an all-time high, and then got even better when Tiger Woods came along. The time was right to get into the business."

Schaefer said he was willing to spend several years building the business after opening in 1994, but had no reason to believe a flurry of fatal body blows was coming his way.

In three painful steps, witness the death of a business.

1. The Internet

"The Internet started being a factor here in my shop in 1999," Schaefer said. "There was a guy in the Bay Area running a site called Tin Cup, and it quickly became eBay's biggest golf dealer. He'd go around to all the golf stores and buy their trade-in clubs cheap, and made a few dollars a club by selling them on eBay. The sales reps from the major companies began seeking him out to buy their older stuff. They needed to make their quarterly quotas, so they sold to him at a discount and he sold it at wholesale."

Per company contract, Schaefer said, those same company representatives could not sell to golf stores for the same price, and the undercutting started to erode the store's core business.

Now, dozens of Internet sites — such as Rockbottomgolf.com and golfballs.com — sell both state-of-the-art equipment at fair market value and last year's equipment at a deep discount.

"A customer asked me if I could match Internet pricing on a club that was $599 in my store and $599 online," Schaefer said. "The state requires me to charge sales tax, which makes my club $40 more expensive. The guy can come into my shop, be fitted correctly for the club, be given a warranty, have the ability to return the club directly to me, and leave with the club in hand, all within five minutes. And he decided that wasn't worth the extra $40.

"I can't do anything about that."

2. The big-box store

Every week, newspaper ads for large sporting goods stores offer brand new, name-brand drivers for $149. In most cases, these were the same TaylorMade or Nike drivers selling for $399 and up just two years ago and remain very good products.

But when the golf club companies come out with their latest and greatest models, they sell last year's technology to the big boxes and online retailers at a discount, retaining the initial $399-and-up price point for the new clubs.

"Large golf companies continue to pump out clubs with three-year-old technology and sell them cheap to big-box stores for half-price," Schaefer said. "The three-year-old TaylorMade driver you can buy at Sports Authority for $150 is a club I can't buy from my TaylorMade sales rep.

"My contract freezes me out of that market, but I do have new-technology TaylorMade drivers at $199, $299 and $399. A guy who has been to the big-box store and has seen the $150 price tag looks at my drivers and can't leave my store fast enough."

3. The economy

The shrinking amount of leisure dollars in this foreclosure-driven economy has even avid players trying to squeeze the most out of their golf buck.

The golfer who used to crave having the latest and greatest equipment in his bag has been forced to hold onto that driver or putter for another season or two.

"If 10 percent of people play golf, and 10 percent of the people have gone through foreclosure, then that's a chunk of people that still may be playing golf, but they're not buying new clubs," Schaefer said. "When things get tight, there are fewer and fewer people who come in and spend."

Bee staff writer Brian VanderBeek can be reached at bvanderbeek@modbee.com or 578-2300.

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