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Holding serve: Racquet Club rallies through tennis slump

June 27, 2005

Born during boom times and volleyed through the bad, the Indianapolis Racquet Club, though a little leaner than in the 1980s, has survived four decades while many of its competitors have double-faulted.

IRC officials said they've survived tennis industry tumult by adding instructors and programs, expanding the pro shop to become one of the biggest in the Midwest, and staying focused on the club's core business.

"It's simple, really," said Ed Brune, who has been general manager and tennis director for IRC since it opened on the northeast side in October 1965. "We're a tennis club, and we never took our eyes off that ball. So our membership didn't drop off as much as some of the other clubs."

But it wasn't easy.

The Sporting Goods Manufacturers Association, a Washington, D.C.-based trade group representing more than 2,500 manufacturers and national brand distributors, has reported modest upticks in the sale of rackets and tennis apparel in the last five years. But an industry slump that started to hit pure tennis clubs in the early 1990s has driven about a third of the facilities in the Midwest and nationwide out of business, according to tennis industry sources.

Some clubs chose to diversify, replacing tennis courts with large fitness centers with indoor running tracks. Some added racquetball, volleyball and walleyball, which is played on a racquetball court. Some clubs erected basketball hoops and replaced tennis nets with soccer goals.

"There were clubs across the Midwest chasing all kinds of things to try to retain members," said Steve Rothstein, a sales representative for Head, Penn and KSwiss, and who formerly ran clubs in Dayton and Cleveland. "It got to be where people thought the true tennis club couldn't make it. Even today, there are a lot more clubs-four or five to one-closing than opening."

Doubt turns to profit

Even though Brune said opening the IRC 40 years ago was "an iffy proposition," it was founded on the crest of a significant U.S. tennis boom. Quickly, IRC investors realized they had a profitable venture and the original four-court facility was expanded.

The IRC was launched by John DeVoe, an Indiana Pacers co-founder, and his partners Walter Kuhn Jr. and Richard Tinkham. The operation began initially, Brune said, as more of a hobby than a business. But it's run like a business now, and though IRC officials declined to divulge financial results, they said it's been profitable for its duration.

After John DeVoe died, his brothers, Steve and Chuck DeVoe, stepped in as major shareholders, along with their wives, Mary and Jody. Other current shareholders are Brune, Curt DeVoe, Jeff Enkema, Stephen Enkema, Wendy Enkema, Jane Malless, Stan Malless, Perry O'Neal, Shirley Sommers and Barbara Wynne.

"This place was built during a time when it was, 'Build it, and they will come,'" Brune said. "On every weekend, we'd have 64 players filling our courts at 6:30 [a.m.] with a waiting list."

Competing clubs cropped up on every side of Indianapolis in the 1970s and for a time there were enough players to go around.

"People were loving the game. It could be social and I think it had some cache," said Jay Hacker, president of USTA's Midwest section. "And I think it seemed like a fun and interesting business to be in."

Then reality set in, said Rick Reifeis, who grew up playing at IRC and now owns the Southside Tennis Club off Keystone Avenue and Interstate 465. Reifeis watched as the colossal Racquets Four on the city's south side folded. The facility that once housed indoor tennis, racquetball, a pro shop, swimming pool and more, now sits empty. In fact, only a handful of racket-sport clubs are left in the metro area.

"It became more difficult to get a return on your investment with a tennis club," said Reifeis, who is entering his fifth year as a tennis club owner. "Land can be very expensive, and with a tennis facility you need a lot of land. We have seven indoor courts, and that takes 44,000 square feet. If you start to lose players, it becomes like an airplane flying with empty seats. Another use for that space starts to look pretty attractive."

Forsaking tennis

Diversification, industry sources said, can drive up expenses, and a club can lose its focus and suddenly find itself in competition with a whole new realm of businesses, including YMCAs, health spas, gyms and even social clubs.

Tennis club diversification ran far and wide.

"Some clubs started giving golf lessons and even dance lessons," said Greg Griffey, Carmel Racquet Club manager. "We've tried to stay up with what people want, but whatever we do, we are a tennis club. We can't lose that focus; that's what's helped us survive and grow."

IRC, too, was facing difficult decisions in the late 1980s and early 1990s. The club that once hosted the city's biggest professional tournament-the forerunner to the RCA Championships-on its outdoor clay courts was facing a second serve in a tough economy.

IRC and other clubs took their first big hit when women started heading to the work force in big numbers. Women were the players who often used the courts during daytime hours. Then, several economic swoons hit the industry in the 1990s and right up through 9/11.

"Before, it didn't seem like our business was affected by changes in the economy," Brune said. "Then we-like every other business-started feeling the hits."

At IRC's peak in the 1970s and 80s, 4,000 players were members. That number fell dramatically, before rebounding these last few years to 3,000.

As membership started to dwindle, IRC officials devised a plan to cater to the members it had. Instead of downsizing, it added instructors, bolstered its programs, and marketed aggressively through local, regional and national tournaments it hosted.

And Brune stresses that IRC does not just target hard-core tennis aficionados.

"We try to make it possible for a player of any skill level to play," he said. "Because of the programming we offer, we're finding the members we have are playing more. We're getting about 800 people through our doors every day."

Pro shop as profit center

Nine years ago, IRC made another major change. The company hired Jeff Rodefeld, a former executive for Macy's department store in New York.

Rodefeld quickly moved to modernize IRC's pro shop, adding bar coding and a computer inventory system. He made seemingly small adjustments-reducing the price of a can of tennis balls 50 cents-which he said made IRC's pro shop competitive with big box retailers. He dramatically expanded inventory, carrying almost every major tennis brand.

"We used to run the pro shop as an amenity to members, really as an afterthought," Rodefeld said. "Now it's definitely a profit center."

IRC's pro shop has expanded three times and more than doubled its floor space since Rodefeld took over. Its gross margins grew from 29 percent to 41 percent. The shop that was once an afterthought now sells more than 2,000 rackets and 6,000 pairs of shoes, and does 5,500 racket stringings annually. The shop has seen double-digit-percentage revenue growth in eight of the last nine years.

"I keep telling Jeff, if you need to expand some more, just tell me, and we'll find another wall to knock down," Brune said.

While the sales have helped fortify IRC's bottom line, Rodefeld said the shop has also been one of the club's best marketing tools. Non-IRC members are welcome at the pro shop.

IRC's pro shop does very little advertising, relying instead on word of mouth through the tennis community and promotions through the Central Indiana Tennis Association.

"We're open seven days a week, and we're one of the only places in the area that can turn a racket stringing around, even on the weekend, in a couple of hours," Rodefeld said. "We're drawing customers from a 90-mile radius."

The IRC pro shop was selected in a Tennis Industry Association poll of the nation's top racket, ball and soft goods manufacturers and associations earlier this year as one of the top 10 tennis pro shops in the United States. The distinction doesn't surprise Rothstein, who covers an eight-state area, including Indiana.

"Jeff made that pro shop better than anybody ever expected," Rothstein said. "I'd say it's the best pro shop within a club in the country, and I'm not alone in thinking that. It's pretty amazing."
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