- AMB Group-owned chain has expanded from 10 stores in 2010 to 41 locations in 16 states
- Experiential retail approach has enabled the company to thrive as its rivals have gone bankrupt
- Multi-faceted partnership with minority owner PGA Tour has proved mutually beneficial
Golf equipment and apparel chain PGA Tour Superstore has leveraged its partnership between majority owner AMB Group and the PGA Tour to become a rare success story in the brick-and-mortar retail industry in the United States.
Following the spectacular rise of Amazon and other e-commerce companies such as Fanatics, a number of US sporting goods chains have fallen into bankruptcy in recent years including Sports Authority, Golfsmith, Sports Chalet, MC Sports, Eastern Outfitters, Total Hockey and Gander Mountain.
By contrast, the PGA Tour Superstore has expanded at a rapid rate, growing from 10 locations in 2010 – when Home Depot co-founder Arthur Blank’s AMB Group took over the company – to 41 stores across 16 states at present. Six stores have opened already in 2019, including Sarasota and Plantation (both Florida), two in Boston (Massachusetts), Austin (Texas) and Denver (Colorado). The goal is to expand to 60 locations in three years’ time and eventually internationally into Canada.
In 2018, the company posted an overall sales growth of 14 per cent, while over the past decade sales have grown by more than 300 per cent. More than 7.5 million customers visited the PGA Tour Superstore last year, exceeding the total attendance at PGA Tour tournaments.
Such is the fanatic interest in the retailer that earlier this year almost 600 customers waited in line for the doors to open at the new store in Austin, while, according to Forbes, one individual showed up a full two days ahead of the launch of the new branch in the Boston suburb of Braintree.
But it is not just casual players who are fans of the PGA Tour Superstore. After struggling with his putting at the start of this year’s PGA Tour Champions, former Masters and British Open champion Mark O’Meara decided to buy a new putter from the store in Delray Beach, Florida, immediately after the first round of the the Oasis Championship in nearby Boca Raton.
After buying a Odyssey White Hot putter for $108 (€97), O’Meara quickly returned to form and won the Cologuard Classic three weeks later at Omni Tucson National, his first victory in over eight years on the senior golf tour.
“I hadn’t been in there [PGA Tour Superstore] in forever. There were like 10,000 putters. It was like a kid going to Disneyland. I started grabbing them all,” O’Meara, 62, recalled in April.
Adapting the Home Depot model
The PGA Tour Superstore is operated by Golf & Tennis Pro Shop, a subsidiary of AMB Group, which also includes the Mercedes-Benz Stadium, the National Football League’s Atlanta Falcons and Major League Soccer team Atlanta United. Founded in 2004, Golf & Tennis Pro Shop was taken over in 2010 by AMB Group, which had been an investor for four years.
The retailer offers in-house custom club fittings and repairs, along with lessons from certified teaching professionals. Other attractions include practice hitting bays, high-tech swing simulators, putting greens and chipping areas. Merchandise includes clubs, accessories, footwear, and a wide variety of apparel for men, women and juniors.
Last year, at all of its stores – which range in size from 25,000-60,000 square feet – associates conducted more than 100,000 custom club fittings, gave about 50,000 golf lessons, and re-gripped more than 750,000 clubs.
Much of the PGA Tour Superstore’s success lies in the same operating strategy that has made home improvement chain Home Depot a dominant player in that retail category: a wide assortment of products, well-trained staff, and a commitment to a high-end customer experience. But it is the added experiential, interactive component that makes the golf retailer stand out from the crowd.
“The experience that people have inside the four walls of our stores is so important. It’s transactional in most other businesses…it’s relationship in our business,” Dick Sullivan, PGA Tour Superstore’s president and chief executive, tells SportBusiness. “The trust factor that we build with our associates, you can’t build that online. The experiences inside the store and the services we offer are so different.
“The distribution model [of golf retail] helps because there are some manufacturers who don’t want to ship to Amazon because if someone buys a golf club and it doesn’t fit properly for them and they play badly with it, then it hurts that brand. We get that benefit on that side,” Sullivan says.
But Sullivan is still quick to point out key separation between the PGA Superstore and its Home Depot connections. “It’s the technology inside our stores that differentiates us – even more so than at Home Depot,” he says. “When you come in, we’ll be able to measure your distance, your ball speed, your launch angle…all those things that are important to your personal game…the shaft weight, the types of shaft…so we can really hone in on what you are looking for. We can really fine-tune that and no one else really can.
“Think of all the sporting goods businesses that went out recently, they didn’t allow that level of customer service inside of their stores and that’s what we do and that’s what makes us different,” he says.
In terms of choosing new store locations, a number of factors go into consideration. Namely, the the amount of golf courses in a 15-20 mile radius and specific demographics such as household income, which tends to be higher in the golfing community.
“It’s great if there’s a PGA Tour event [nearby], but they tend to move around so we don’t hone in on that,” says Sullivan, who is also chairman of the National Golf Federation’s board of directors.
The company has also gleaned some opportunity from the 2017 bankruptcy of Toys ‘R’ Us and Babies ‘R’ Us, buying a number of that chain’s stores at auction – including in Chicago, Indianapolis and Boston – and converting them into PGA Tour Superstore locations.
“We spent a long time last year in auctions competing against a lot of retailers in the US trying to pick off these leases. We got some good deals, some inexpensive leases, so that helps the business model,” Sullivan says.
In regards to expansion, Sullivan says “there is no limit on capital” but the company is wary of over-expansion in order to keep the customer experience at a high level.
“We have to very sensitive to the human resources capital, not the financial capital, so we have to make sure we have well-trained people which is the most important part of our business,” he says.
Despite its rapid growth, the PGA Tour Superstore has so far captured just 10 per cent of the market share in the overall golf retail industry, with 50 per cent of golf-related equipment and apparel purchases taking place at the approximately 15,000 golf courses over the US, as well as at leading sporting goods chains such as Dick’s Sporting Goods and some independent retailers.
“There is tremendous white space, there is tremendous upside for us,” Sullivan says.
Key partnership with PGA Tour
Another key factor in the retailer’s success lies in its name, having secured a 50-year license until 2060 with the PGA Tour.
“The brand is critical to us,” Sullivan says. “When Arthur [Blank] acquired the company back in 2010, one of the first things we did was make sure that we had a long-term relationship with the PGA Tour. At that time it was Tim Finchem who was commissioner and we didn’t want to wake up in five years and renegotiate or take the name off the building, we needed that long-term equity. So we established a 50-year relationship with the PGA Tour, which is the longest license that they’ve ever had. And it’s been a tremendous relationship with [current commissioner] Jay Monahan.
“Jay, when he talks to the media about growth opportunities, always talks about our PGA Tour Superstores. And I love it that he looks at it as his business, it’s not Arthur Blank’s business. And Arthur would say the same thing. We want all of our customers to think it’s the PGA Tour’s business,” he says.
Incorporating the PGA Tour name and logo comes with certain pressures, Sullivan adds. “When you think of golf, the PGA Tour is at the top but there is a tremendous responsibility as well to deliver on that promise in terms of what that brand stands for. We think it’s critical and there are so many positives with it. The only negative is that people might be intimidated, that beginners might think it’s only for the best, but it’s not the case. We’re here to grow the game.”
The PGA Tour is also a minority owner in the company. The partnership also extends to the PGA Tour Superstore’s e-commerce site, which can be reached via the official PGA Tour website.
“It’s good because we are truly partners and we have long-term interests together so it’s not just a licensee relationship. With the equity position they have – they have the second biggest equity position outside of Arthur – it’s critical as they look at ways to help grow our business,” Sullivan says. “Wherever we can join up together, we try to do that. If it’s integrated properly it’s a win-win for both of us.”
In a mutually-beneficial partnership, the PGA Tour Superstore allows the Tour’s official sponsors to activate at their stores. “We can be an outlet for them to extend the sponsorship relationships so we can activate all over the country, 365 days a year. It’s like we have 41 stadiums if you look at it that way,” Sullivan says.
The PGA Tour, for its part, is eager to share in PGA Tour Superstore’s success. “We are extremely proud of the success of PGA Tour Superstores, especially given the challenging retail market in which other brick and mortar golf retailers are experiencing declining sales,” Len Brown, the PGA Tour’s chief legal officer and executive vice-president, licensing and merchandising, told SportBusiness.
“They realized early on that coupling the PGA Tour brand with a truly experiential shopping environment, fun for golfers and non-golfers alike, supported by superior customer service would be the winning combination it’s proven to be, and we continue to collaborate with them to make it as authentic as possible,” Brown says.
Benefits of belonging to AMB Group
The PGA Tour Superstore benefits from being in the AMB Group by being able to learn best business practices from other properties in the portfolio.
“Culturally, we meet every month as a management group and we share best practices, whether it’s in human resources, IT, finance…those functional areas cross over the entire business so we get smarter with the more resources we have,” says Sullivan, who was previously chief marketing officer for both Home Depot and the Falcons.
More directly, the PGA Tour Superstore has multiple swing simulators installed inside Mercedes-Benz Stadium as well as hole-in-one competitions at every major event, in which winners can win a Mercedes car. “We take advantage of all 70,000-plus fans who are coming in and we’ve had a number of national sporting events from which we’re getting fans from across the entire country and they are getting to see our product. Wherever we can, we try to blend in,” says Sullivan.
“Every fan in the Atlanta area if they are a Falcons or United season-ticket holder they will have opportunities to get loyalty programs and be invited to special events and things like that,” he says.
PGA Tour Superstore’s experiential strategy also expands on a wider customer-first philosophy at AMB Group. “The associates feel like there is purpose with our businesses, meaning it’s not just coming to do a job that there is a higher calling,” Sullivan says.
To further expose the brand, the PGA Tour Superstore also has a marketing partnership with the NBCUniversal-owned Golf Channel. In 2015, the retailer announced a multi-year deal with the channel, which includes programming opportunities – such as new product spotlights and special features on custom fitting and other game-improvement services – and a strategic media buy.
The content is produced from the PGA Tour Superstore’s Orlando location, which is less than a mile from Golf Channel’s world headquarters.
“We believe that we should be the voice of golf retail and they’ve allowed us to do that at different times of the year, such as Father’s Day and Christmas,” Sullivan says.