Washington Golf Closes 4 Stores in the Southland

Despite a flourishing nationwide golf retailing market, a major golf equipment chain has closed its four Southern California stores and retreated to its home base in the East.

Industry insiders say Sunday’s shutdown of Virginia-based Washington Golf Centers’ shops in Santa Ana, Torrance, Los Angeles and Encino was caused by the company’s inability to manage its 5-year-old expansion effort and isn’t a warning of tough times ahead for the industry.

But the closures, which included laying off 35 employees, does underscore the competitive nature of the fast-growing industry, which, like the video rental business in the 1980s, is consolidating as strong operators edge out the weaker ones.

The sport is picking up followers with the highly publicized triumphs of Orange County golf superstar Tiger Woods. But as business booms, the big, well-financed retailers are taking market share from neighborhood shops.

“Some of the smaller independents can’t hold out against the big discounters,” which have started adding pricier name brands to their inventories, said Bill Hodson, sales manager for Winn Inc., a Huntington Beach manufacturer and wholesaler of custom golf club grips.

The mix enables discounters to attract older, well-heeled golfers with a yen for prestigious equipment as well as younger players with limited budgets.

*

Golfers in the U.S. spent $16 billion on the game in 1994--almost double the amount spent just eight years earlier, the National Golf Foundation reported recently. Retail purchases of golf equipment topped $6 billion in 1994, with greens fees accounting for the remaining $10 billion, according to the study.

The spending has lured the unprepared into the business, said Larry Taylor, president of Chatsworth-based Rawlings Golf.

“The market is really healthy in terms of consumer demand, but it is easy to get into the retailing business. We feel that there are still too many outlets, so there will be some further closings,” said Taylor.

Washington Golf wasn’t a victim of retailing incompetence, industry insiders said. “They are one of the best golf club retailers in the world,” said Bruce Parker, president of Callaway Golf Co.’s sales subsidiary.

But it did have problems managing from a distance. “They’ve had a lot more problems with the California stores than the Eastern stores, including thefts of goods,” said one industry source who asked to remain unidentified.

Trying to keep four shops operating in Southern California while focusing most of its energies in the East “just wasn’t worthwhile for us,” Washington Golf vice president Joe McOwen acknowledged. The company has 10 stores in the Washington area and is the South Korea distributor for clubs made by Carlsbad-based Callaway.

*

In Southern California, the company faced competition from discount golf centers like Santa Ana-based Roger Dunn Golf Shops and Nevada’s Las Vegas Discount Golf & Tennis and from well-established sporting goods chains and even big discount centers.

Costco, for example, now sells high-end brands of clubs, such as Callaway, that were once within the exclusive purview of golf-specific retailers.

And chains such as Sports Chalet and Oshman Sporting Goods are adding or expanding golfing sections to meet demand for clubs, clothing and other equipment.

Houston-based Oshman and Las Vegas Discount Golf launched a pilot program in March with a Las Vegas Discount center located inside Oshman’s Irvine retail store. “It’s working very well,” said Tom Hurford, executive vice president of the Nevada-based golf equipment retailer.

Las Vegas Discount Golf has opened two new stores since June--one in Irvine and one in Huntington Beach, giving it 45 outlets, including four in Orange County and four in Los Angeles County. Hurford said the company plans to open seven new stores by the end of the year, three in California.

The expansion, he said, is made possible because of double-digit increases in the company’s same-store sales. The sales hikes, Hurford said, are fueled by the growing number of people playing golf.

“Half of all the golf played in the past three years was played by people over 50,” he said. “That means that the baby boomers’ families are growing up and they are finding more time for golf, and they are in their prime earning years, so they have more to spend on their equipment.”

At the other end of the spectrum, he said, the success of 21-year-old golf champion Woods has increased the sport’s attraction to younger players and to minorities, broadening the market for golf equipment.