2005: Stretching an Idea

Plano, Texas

When Adams Golf developed the first generation of Idea irons nearly three years ago, the company debated internally whether even to introduce the product, says chief executive Chip Brewer.

So radical was the notion of marketing an integrated set of irons and hybrid clubs that Adams wasn’t sure consumers were ready for it. Now, as Adams prepares to launch its third and most ambitious generation of Idea products, company officials argue that the vast majority of golfers are ready for Idea-type products.

“The technology will pervade the market,” Brewer says. “The logic is undeniable.”

Over the past two years, hybrid clubs have gained broad acceptance among consumers and even Tour players, driving strong, double-digit increases in industry-wide metalwood sales. So, the argument goes, consumers should be buying sets that seamlessly incorporate hybrids – essentially delivering the same performance characteristics as long irons, but in a much easier-to-hit package.

“A majority of iron sets need to be rethought,” Brewer says. “The consumer shouldn’t be purchasing a set and then throwing away the 3-iron and 4-iron. They should buy a set that has the right technology integrated into it.”

Adams will make that case most forcefully beginning next month, when it begins shipping five new Idea models: the a2 and a2 OS hybrid sets; two models for women, including a 12-piece boxed set; and one for seniors or players with particularly slow swing speeds.

Randy Ramsey, executive vice president of Washington (D.C.) Golf Centers, has been one of the most vocal retail proponents of hybrid sets. He says Idea-type products “are making the game easier for everybody. We’re trying to get the word out to people that that’s the way to go.”

“(Adams is) making a set that truly fits the needs of a lot of golfers in terms of game-improvement enhancements and playability,” says Pete Line, general manager of Carl’s Golfland, a major off-course account in the Detroit suburbs.

Each set has distinct hybrids, an effort, says Tim Reed, Adams’ vice president of research and development, to differentiate the products, improve club-to-club performance and eliminate any gapping issues. The a2 OS, for mid- and high-handicappers, figures to be the most popular model.

“This one was a lot easier because we’re not dealing with psychology,” Brewer says. “Egos aside, (those players are) realists and they’re just looking for results.”

Kerry Kabase, sales director for Edwin Watts Golf Shops, also believes the a2 OS hits the market’s sweet spot, but he’s less certain what the reaction will be to the a2 model, with which Adams is appealing to more skilled players.

“I just don’t know how many better players really have bought into using a set like that,” Kabase says.

That’s yet to be determined, but what’s clear is that the Idea franchise has ­transformed Adams, which was best known for its fairway woods. Iron sales now are Adams’ biggest category, accounting for nearly 40 percent of sales, up from 20 percent in 2002. Brewer believes irons still have the biggest sales upside, though he volunteers that the company lost momentum because of a somewhat tepid response to the second-generation Idea a1 and a1 Pro irons.

“We bogeyed that,” Brewer says. “The a1 didn’t differentiate itself from the original Idea.”

That, along with a first-quarter decision to mark down the Redline RPM driver line, turned 2005 into what Brewer calls “a rebuilding year.” The fact that he would use such a phrase speaks volumes about how high the expectations have risen at Adams in recent years. This is a company that knows plenty about rebuilding, having gone through a difficult post-IPO stretch, including significant losses from 1999 to 2002.

But Adams has posted increased sales and profits the past two fiscal years. And despite the fact that 2005 sales were off 2.4 percent through June compared with the year-ago period, the company’s net income rose slightly, to $4.7 million. And Adams is sitting on more than $13 million in cash.

Brewer is convinced a revitalized Idea franchise, along with the recently released 460cc RPM Dual driver, will re-energize sales at existing retail accounts, and perhaps even open up new green-grass distribution. To mine for new business, he’s increased the sales force to 48 from 38.

One new customer is Jack Dillon, corporate director of retail for Meadowbrook Golf Group, which operates 25 courses. Dillon never has carried Adams products at Meadowbrook, but after reviewing the new Idea line earlier this month, he came away “really pleasantly surprised.” So much so that he plans to carry the product in some of Meadowbrook’s pro shops.

He was particularly impressed with the A2 hybrid.

“I love the streamlined look,” Dillon says. “It’s a club that a 10-and-under (handicapper) is going to want to play with.”

If Adams can tap into that market, Brewer’s rebuilding plan will be complete.

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