Golfsmith stores carry golf equipment, apparel and accessories, and have in-store putting greens for customers to test out products. Stores also feature computerized swing analyzers and golf simulators. Customers at the Sterling location can sign up for golf lessons with third-party provider GolfTEC.
“We’re not a sporting good store where it’s just self-service. Our people are highly trained to fit you with the right clubs so you’ll play better,” said Marty Hanaka, president and chief executive of Golfsmith.
He noted the company is looking to hire 25 to 30 employees at each store: “We need a store that is big enough to allow the experiential model to come to life.”
The Washington area is one of seven markets, including Atlanta, Baltimore and Cleveland, in which Golfsmith is moving to open a total of 10 stores this year. The retailer, with 79 existing locations nationwide, identified more than 100 locations for potential growth.
“We targeted the ones we felt were underserved by off-course speciality stores,” Hanaka said. “Washington, the fourth largest golf market, was the most underserved.”
Hanaka estimates the expansion effort, and relocation of four stores, cost about $30 million, funded by cash flow from operations. Golfsmith most recently reported a profit of $1.3 million in the third quarter of 2011, compared with a net loss of $1.1 million for the same period a year earlier. Sales rose 8.3 percent to $101 million.
“We’re taking share in a struggling marketplace,” Hanaka said. “The experiential model is something that people really respond to, and we’ve put a lot of emphasis on hiring and training.”
Specialty golf retailers, such as Golfsmith, endured sluggish sales during the recession as customers retreated from the market. The industry is the midst of a recovery, with total year-over-year sales up 3.2 percent to $3 billion as of November 2011, according to market research firm Golf Datatech.
As the industry struggled through the downturn, Golfsmith, founded in 1967, took time to retool operations by adding more apparel and expanding online sales.
“Golfsmith does a good job in offering one-stop shopping,” said Tom Stine, co-founder of Golf Datatech. “The off-course [specialty] retailers have a big advantage in terms of selection.”
Golfsmith will come up against a number of speciality stores as it branches out in the Washington area, including Golf Galaxy in Fairfax and Edwin Watts Golf in Falls Church.
Not to be deterred, Hanaka said he is scouting additional sites in suburban Maryland.