2005: Nickent’s extreme makeover starts with Tour validation
Monday, September 12, 2011
By Mike Mazur
Tim Petrovic wasn’t the only one smiling after his victory at last month’s Zurich Classic of New Orleans. So too were executives at Nickent Golf.
It was Petrovic’s first triumph on the PGA Tour. And it also was a “first” of sorts for Los Angeles-based Nickent: Never before had the company’s equipment been used in a Tour victory.
Endorsement agreements with TaylorMade and Srixon limited Nickent from touting Petrovic’s use of its 3DX Ironwood, but Nickent officials were crowing just the same. The occasion underscored the company’s efforts to transform itself from a little-known component maker into a full-fledged equipment brand.
“I want to make every American aware of Nickent,” says Michael Lee, Nickent’s chief executive who co-founded the company in 1996. “But it takes time. My favorite saying is Rome wasn’t built in a day.”
But the presence of Nickent’s flagship product, the 3DX hybrid, in the professional ranks has grown quickly over the past year. On the Nationwide Tour, where Nickent has focused its marketing efforts, company officials say 30 3DXs were in play at the Rheem Classic held last month. The combination of other new products, such as the Pipe putter, and a restructuring of its sales force also has expanded distribution and boosted sales.
For all its momentum, however, Nickent has issues to overcome.
During its early days as a component maker in 1998, Nickent was named as a defendant in a patent-infringement suit filed by Adams Golf. Nickent countersued, and ultimately the dispute was settled and closed under confidentiality agreements. But that legal skirmish gave Nickent, fair or not, a reputation as a knock-off house that the company has not yet been able to shed completely. That stigma has prompted some retailers to resist carrying Nickent’s products.
“How can I justifiably sell Adams, Callaway, TaylorMade or Titleist products and be considered a good partner, while I’m also chopping them off at the knees by selling a (Nickent) club at a fraction of the cost that looks exactly like the club they put all the R&D money into?” asks one prominent retailer.
Nickent executives insist such criticism is out of bounds, saying it has no relevance to the company they run today. Lee simply states that in the mid-1990s, it was commonplace for component companies to “share some similarities to major manufacturers,” and he maintains that allegations of infringement made against Nickent never have been proven.
“Nine years ago, did we have models that were more friendly to other people’s designs? Absolutely, yes,” says Ian Zubkoff, Nickent’s executive vice president of sales. “Have we for the past six or seven years and going forward? No. We knew that wasn’t the future. And so we grew.”
Indeed, Nickent’s business model essentially has flipped during the past 10 years.
The component business – which in 1997 represented 90 percent of Nickent’s sales, primarily under a subdivision called CA Components – was phased out by 2004, Lee says. That year, Nickent also launched a 3-year marketing plan to begin the conversion into a branded original equipment manufacturer, or OEM.
Nickent hired Josh Trivett as director of tour operations to begin recruiting Nationwide Tour players to use and validate the company’s products. In addition, the company is spending $2 million in advertising this year and has assembled a sales force of 35 independent representatives.
According to Lee, Nickent generated sales of about $25 million in 2004, and he expects that total to increase 35 percent this year. The company says it has about 1,400 retail accounts, including Edwin Watts Golf Shops, which carries Nickent equipment in about half its stores.
“Some of our guys have specifically done pretty well with that hybrid club,” says Kerry Kabase, director of sales at Edwin Watts. “It’s a good price-point item ($99 suggested retail) and not all our equipment can be (premium-priced).”
Nickent, however, has greater ambitions. It plans to move into a higher-rent district. Rather than compete at the price tiers inhabited by the likes of Nicklaus Golf and Tour Edge, Lee says, “We’re now leaving that track a little bit, and shooting at Adams Golf and Cleveland Golf.”
Pricing on its latest offering, the Pipe putter, reflects the new strategy: Suggested retail is $199.
With original equipment designs and premium prices, Nickent officials say their makeover soon will be complete.