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New golf superstore part of retail shakeup: Golfsmith goes head-to-head with Golf Galaxy

November 13, 2006

One of the nation's largest specialty golf retailers, Golfsmith, is preparing to take a swing at the reigning champion of golf stores in central Indiana.

The Austin, Texas-based chain is planning a 28,000-square-foot superstore in space now occupied by Marshalls in Castleton, less than a sand wedge from fellow category killer Golf Galaxy.

The move is part of a major shakeup in a part of Indianapolis that's long been a headquarters for golf shopping.

The arrival of another national heavyweight to compete with Minneapolisbased Golf Galaxy could mean lower prices and better service for consumers, but it was also a factor in the demise of two other golf shops nearby.

The used golf equipment store 2nd Swing went out of business this fall, and Indiana Golf will close Dec. 31.

"We're going to get out before it really gets tough," said Indiana Golf General Manager Josh Leve.

Leve said his store could no longer keep up with the buying power of the huge chains, lower prices on the Internet, and waning customer loyalty. Indiana Golf is down to its last six locations. The company once had stores in Lafayette and Bloomington and operated as a Pro Golf franchise.

Golfsmith, which has 60 stores in the United States, including four in Chicago, will be opening its first in Indiana. The Castleton location gives the publicly traded company a chance to siphon customers from Golf Galaxy, a roughly 60-store chain founded in 1997.

Golfsmith has been looking at central Indiana for several years, waiting for the right opportunity, said Mark Perlstein, a partner with The Linder Co. who represented the retailer.

"It's a pretty big coup for Indianapolis to get these guys," Perlstein said.

Golfsmith may consider more Indiana stores, but for now is focused on opening the Castleton store by April, in time for Father's Day shopping, he said. The new store will be about half the size of a football field.

Meanwhile, Marshalls will remain in its space until after the holiday season, when it plans to move to Nora Plaza.

The arrival of Golfsmith could mean better deals, improved service and more products for Indianapolis-area golfers, and also could boost other retailers nearby, said Marianne Bickle, chairwoman of the retailing department at the University of South Carolina.

Golfers-whether serious or just out to have fun-are willing to pay big bucks for the requisite clubs, bags, balls, gloves and shoes.

More than 28 million people in the country golf at least once a year, and they spend more than $4.7 billion annually on equipment, according to a study by the National Golf Foundation, a research and consulting group in Jupiter, Fla.

"Golfing has become not just a sport, but an experience," Bickle said. "That experience translates into a billion-dollar industry."

Bickle said small shops can command a share of the market by offering superior customer service.

Club technician Mark Bustamante, who works at locally owned Fairway Golf, said he isn't worried about Golfsmith. Fairway has locations in Fishers and Greenwood.

"If we were going to be scared, we would've been scared when Golf Galaxy opened," Bustamante said. Golf Galaxy opened in 1999.

Anticipating Golfsmith's arrival, Golf Galaxy has renovated its roughly 20,000-square-foot Castleton store and is adding The Golf Works, a component shop for golf aficionados who like to build their own clubs. One of Golfsmith's specialties is custom club components.

"It's going to come down to cleanliness, service and relationships with customers," said Tom O'Connor, a Golf Galaxy manager.

A Golfsmith spokesman said by e-mail that company policy forbids him from discussing real estate plans.
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