The remaking of MacGregor: Once troubled clubmaker hopes for revival

After settling last year’s debts for what one creditor called “sense on the dollar,” MacGregor Golf owner Barry Schneider, the Californian who made a fortune in the commercial flooring business, decided earlier this year to increase his investment in the storied clubmaker, perhaps by millions.

Since then, he has quietly transformed the company, which at the end of last year was coming off one of the most tumultuous periods in its 104-year history. In 2000, a number of creditors who were owed more than $1 million retained a Dallas law firm in their battle to get paid, as the company failed to achieve sufficient sales. At the same time, Schneider and his equity firm, Parkside Group, which bought MacGregor in 1998, hired an investment banker for advice on whether to sell the company. And there were reports of layoffs and the departures by key personnel, including president and chief executive William Marsh.

Now, though, Schneider seems committed to MacGregor and to making it a force in the club business – albeit one with less overhead, new management, a new sales force, a new marketing plan, new products, and, not surprisingly, ambitious goals. All these changes, however, don’t guarantee success, especially in a soft market where even well-established brands are struggling. Still, Schneider is confident.

“We think we will become the aspirational brand, the brand that every avid, core golfer wants to play,” Schneider said Oct. 23 in the first of a weeklong series of meetings with media representatives at the company’s new plant, a smaller, more efficient facility.

The meetings marked a relaunch of sorts, after a yearlong reorganization process in which Schneider took on day-to-day responsibilities as chief executive officer, personally downsizing the company. He won’t say just how much smaller it is, but he talks of managers being closer to customers.

Then he made a couple of key hires:

  • John McNulty, who in April became president and chief operating officer. A former MacGregor and Wilson Golf executive who formerly was senior vice president and general manager of Brunswick Corp.’s Outdoor Recreation Group. There, he said, he oversaw the remaking of an old bicycle brand, Mongoose, growing it from a $30 million business into an extreme sports market leader with some $200 million in sales.
  • Dave Wood, senior vice president, product innovation. The former president of Wood Brothers Golf, whose brother designs clubs for Cleveland Golf, Wood is a highly regarded club designer. Wood’s responsibilities will include getting clubs in the hands of PGA Tour players. At MacGregor, he works closely with Jim Bode, vice president of research and development, who has been with MacGregor for 17 years.

Together, Wood and Bode have designed a modern version of the MacGregor VIP iron, first introduced in 1967, adding a patent-pending technology they describe as V-Foil, an acronym for Vectored Force-of-Impact Localization. The design – with a thin bar that protrudes from the back of both muscle-back and a cavity-back forgings – distributes more of the club’s mass in line with the point of impact, and it moves the mass farther away from the clubface. The result, according to the company, is irons that increase power, forgiveness and lift, while reducing clubhead rotation.

With the new VIP woods (titanium, 340cc driver and steel fairway), the Wood-Bode pair have come up with another patent-pending technology referred to as a V-Cavity. This design, featuring a cone-shaped cavity in the sole of the club, accomplishes a similar result: more mass (which increases with the added surface area of a cone vs. a flat surface) in line with the point of impact and farther from the clubface.

Much of the brand message will be focused on forged irons, a segment the company believes will grow fast, as more well-heeled, aging baby boomers play more golf.

“These are better irons, period – cast of forged, we don’t care,” said McNulty, who initiated discussions with Schneider early this year upon learning the president’s post was open. “We’re going to try to demonstrate that perimeter weighting is a totally inferior design (than ours) for an iron, even if you’re a 15- or 20-handicapper.”

McNulty, who splits his time between an office in Chicago and the Albany plant, signed Magnani Continuum Marketing, a Chicago-area firm that was instrumental in his success at Brunswick.

Magnani will be responsible for MacGregor’s $8 million marketing budget; plans call for print and cable television advertising, 1,200 demo days, 300 staff club pros, college sponsorships and increased play on the PGA Tour.

Mike Klugh, a buyer for Edwin Watts Golf Shops at its headquarters in Ft. Walton Beach, Fla., believes Wood’s respect among Tour players will be key for increasing exposure for MacGregor, but he stopped short of predicting whether the company’s products will be hits.

“I think they were well-made clubs, and they look like good sticks, and I’m sure they perform as good as they look,” said Klugh. “But I think without a shadow of a doubt Nike (which introduces forged irons and other clubs next year) will drive the business in 2002. But some people will prefer to have a Mizuno or a MacGregor or a Hogan.”

MacGregor can separate itself from this pack of competitors, McNulty believes, by focusing on the innovations of its new designs, and he has appointed four regional sales vice presidents to make sure buyers hear that message. Those four, in turn, have built the sales force up to 31 full-time, in-house representatives, he said. The goal is to have 35 by Thanksgiving.

Though not as big as the biggest equipment companies’ sales staffs, it’s an aggressive number for a small company, one that just a year ago was having disputes with creditors.

McNulty won’t talk about the past, though.

“We are in an aggressive growth mode,” he said. “We don’t want anybody thinking we intend to be a niche marketer.”

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