2005: Business - The First & The Fiftieth
Friday, August 19, 2011
I’m juiced,” says Steve Boccieri.
It’s 5 p.m. on the first day of the PGA Merchandise Show, and Boccieri has been on his feet since the show opened eight hours earlier, subsisting on just a half bottle of water.
But Boccieri has reason to be upbeat. He’s come here to introduce the golf world to the Heavy Putter, and all indications are that the golf world has taken notice. His booth has been packed with retailers and others who want to test and place orders for the Heavy Putter.
Over the public-address system, the announcer calls the show to a close, but curious visitors continue to mill around Boccieri’s booth, confounding his modest expectations. Nearby, his wife, Sandy, is helping customers.
“We didn’t come here to sell putters,” he says, but he has found interested buyers.
The next morning, Martha Scholz made the one-hour drive to Orlando from Brevard County, on Florida’s eastern coast.
Only two months earlier, Scholz, 52, had opened a Golf USA store in Melbourne, her first retail venture after retiring from a career raising money for various universities, most recently the Florida Institute of Technology.
Sitting at breakfast with other Golf USA franchise operators and corporate executives, she’s discussing the idiosyncrasies of the Brevard County market, where she says the median age is 41 and shoppers seek values.
“I don’t sell a lot of steel-shafted, stiff flex, muscle-back irons,” Scholz says. “And where did all these left-handers come from?”
“Canada,” says Rick Benson, Golf USA’s vice president of franchise sales and operations.
Scholz says she plans to hold a Canada Day at the store in February. “That’s a good idea,” Benson says.
Each year, new manufacturers and retailers arrive in Orlando for the industry’s largest merchandise showcase, undeterred by statistics that golf sales are flat and participation has been declining slightly in recent years. They have a better product, a prime retail location, a desire to be their own boss, to make their mark in golf. That’s what has brought Boccieri and Scholz to Orlando. Both have attended the show before, but never to launch a new product or buy merchandise.
Boccieri used to work as a consultant, doing seismic analysis on piping at nuclear plants, but by 1999 he’d had enough.
“When you open up that big door, there are high levels of radiation,” he says. “Sandy wasn’t happy. I wasn’t happy.”
So Boccieri quit to concentrate on Engineered Golf, a firm he had started five years earlier to focus on development of shafts. In 2002, Robert Prince, co-chief investment officer of Bridgewater Associates, came to him with an idea for a long putter with an adjustable shaft and a heavy head. Boccieri experimented with the idea, then stuck a shorter shaft into the heavy head.
“It felt like a bowling ball on a stick,” he says.
But Boccieri sensed he was on to something, so he kept tinkering, eventually adding weight to the butt end of the shaft to counter the heavy head mass. He realized he had hit upon a product that promotes a pendulum stroke with a soft feel at impact. With Prince’s support, he launched the Heavy Putter.
Holding one of his putters, Boccieri says the construction of a single head requires 110 minutes on a milling machine at $1 per minute. So he arranged overseas manufacturing at roughly a third of the cost. But he’s facing thin profit margins. He has a product that is costly to manufacture, but he notes he doesn’t have the pricing leverage of TaylorMade with its r7 Quad driver.
“They’re selling that for $500 and I’m selling this for $200,” Boccieri says.
While launching Heavy Putter the past two years, Boccieri has taken no salary, a fact made slightly easier because Sandy, who once appeared on Broadway in “Grease,” now is a vice president at Estee Lauder.
He estimates that it has cost $500,000 to bring Heavy Putter to market. The show itself was roughly a $70,000 hit. That includes travel and meals for his staff, $10,000 to rent the booth’s lattice metal frame, $8,000 for signage and another $8,000 for four display pieces.
It all adds up. And like other exhibitors, he’s frustrated by high set-up costs in the convention center. “Reed (show owner Reed Exhibitions) really hammers you for everything,” he says.
Scholz, who grew up playing golf with her father, also has been writing plenty of checks recently, but she has no qualms. As a fund-raiser, she had grown “tired of taking people out and saying, ‘I’m not going to ask you for money. And by the way, would you write Show, P26444
me a check for a million dollars?’ ”
She says she’s enjoying her new life as a retailer and feels confident about her decision to affiliate with Golf USA.
“The support you get is more than worth the franchise fee you pay,” she says.
It cost Scholz $39,000 to get in the door with Golf USA. She also pays a franchise fee that is 2 percent of gross sales and a 1 percent advertising fee.
Through Golf USA, she is able to secure product, at discounted prices, from most major brands. By contrast, she says her nephew is in the process of opening an independent golf store. “He has to pay $30,000 to get a discount,” Scholz says. “I don’t have to do that.”
She estimates that she buys more than 60 percent of her merchandise through Golf USA purchasing programs with major manufacturers. But she has come here looking for deals. “I need a value-priced golf bag,” she says. She’s looking for other accessories, and she also needs to replenish her Nike inventory. She’s excited about the company’s women’s irons, and she’s counting on Nike to carry her footwear business since FootJoy, like its sister brand Titleist, is reluctant to sell to new stores.
Callaway has emerged as her top equipment brand, and that company’s trade-in program “has been huge for us.” But she’s already learned that it’s hard to make money selling premium brands, so she’s looking for other profitable items. “I need to sell more bags,” she says. And she’s high on Tour Edge’s equipment. “They have a 30-day playability guarantee that really sells clubs,” Scholz says.
By 4:30 p.m. Saturday, Scholz has secured deals on Sabona bracelets, Wittek fixturing and other merchandise. She’s surprised by some of the generous show specials, and vows to take greater advantage of them in the future.
“I’ll know next year to drive a hard bargain,” she says.
But Scholz exercised discipline, passing, for instance, on winter gloves, an item some of her customers have requested.
“It’s hard because you want to make everybody happy,” she says.
It’s noon on Sunday, the show’s final day. Scholz is back in her shop in Melbourne, though she jokes that she sent her store manager, Marc Pfannenstein, here Sunday “to correct any mistakes I made.” Foot traffic has ground to a halt and many booths are staffed only by a lone employee, sitting idly.
But the Heavy Putter booth remains crowded, as visitors elbow for space to hit a few practice putts, their golf balls occasionally bumping on the way toward the cup. The upstart company has opened accounts with some major chains, and Boccieri estimates Heavy Putter has sold about 1,000 pieces.
“I feel as if there’s a lot of weight and responsibility on my shoulders to the people who have been around me supporting the product,” Boccieri says. “I’m trying to be happy about the success of the show, but I feel stressed.”
A consultant for much of his professional life, Boccieri is struggling with being the front man for a start-up company. He’s happy for the chance to promote his product, but moans about how uncomfortable he felt filming an interview for The Golf Channel.
As if on cue, a man stops next to Boccieri, and points at him, saying, “I saw you on The Golf Channel.”
Boccieri rolls his eyes. He’s no longer an anonymous consultant.
“My wife was the Broadway star,” he says. “I’m just a kid from Brooklyn.”