2005: Big sticks: Shafts buck trend

Pete Sanchez, president of Fujikura Composites, recalls the first few times he sat in front of customers and informed them that the price for his company’s Speeder shafts would be more than $300.

Laughter often followed, and some would ask, “Are you kidding me?”

“And sheepishly, we would say, ‘No, that’s the price,’ ” Sanchez says. “And they would order a few.”

Those orders gradually grew larger, helped along by the Speeder’s heavy usage on the PGA Tour and its reputation as a product for better players. While Fujikura does not disclose financial data, Sanchez says both revenues and earnings have been growing 25 percent or more each of the past four years. And the Speeder helped create a halo effect that lifted demand for Fujikura’s other products.

“Our goal was to build a brand, not a model,” Sanchez says.

The recent success and heightened profile of premium shaftmakers such as Fujikura and Aldila provide a counterpoint to the declining prices and profits suffered by golf companies in other equipment categories. Makers of exotic, high-end shafts have benefited from the industry’s increased emphasis on custom fitting, rising awareness of the golf shaft’s importance, and savvy brand promotion, including trumpeting usage on the PGA Tour.

“We’re getting good visibility on Tour and promoting that through advertising and creating consumer pull,” says Mike Rossi, Aldila’s vice president of sales and marketing.

Shaftmakers also have overcome concerns about the consistency of their manufacturing and generated excitement about their technologies. For instance, Fujikura hypes its use in Speeder shafts of a proprietary carbon fiber called Triax, which the company says decreases shot dispersion by countering the shaft’s tendency to elongate during the swing, while Aldila promotes the power and consistency fostered by its Micro Laminate Technology.

Only a few years ago, these companies were scrapping for business from major club companies.

“That side of the business is definitely a buyer’s market,” Rossi says.

Aldila, for instance, reported in Securities and Exchange Commission filings that the average selling price for its shafts had declined 9 percent in the five years leading up to 2003, but rose 11 percent that year and 24.2 percent through the first nine months of 2004. Even more stunning was the fact that its gross profit margin as of Sept. 30, when it last reported financial results, had nearly doubled to 36.3 percent from 18.4 percent a year earlier.

Those gains corresponded with Aldila’s launch of the NV shaft, its high-end product that is used by many tour players. Rossi says premium shafts now account for nearly 25 percent of sales, up from about 5 percent prior to the NV introduction. (He notes that rising prices for graphite also reflect increased demand for the material in other industries, such as aerospace.)

Sanchez believes the market for exotic shafts still has a big upside. Noting the emergence of hybrid clubs is “driving more and more players to try graphite,” Sanchez reasons that, from there, it’s a short jump to using graphite in long irons, and perhaps in all irons.

Rossi is of a similar mind; he says Aldila will unveil a NV iron shaft at the PGA Merchandise Show later this month, and believes better players will begin using graphite in their irons, both for performance reasons and because it causes less wear and tear on golfers’ bodies.

The aura that now envelopes these brands and their products has helped rescue a shaft market that only a few years ago was becoming marginalized by large clubmakers. Now companies like TaylorMade and Cleveland Golf are promoting their use of premium shafts in co-branded golf clubs that also bear the names of shaft companies.

This trend has elevated the profile of shaft manufacturers, making the category a bright spot in an otherwise lackluster equipment market. But Sanchez, for one, understands the fate of his business still is tied to the big clubmakers.

As he often says, “We want to be best supporting actor, not the best actor.”






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