In 2014, when Bob Parsons founded Parsons Xtreme Golf (PXG), parts of the golf equipment industry were in an ugly place. Dick’s Sporting Goods laid off more than 400 PGA of America pros from its stores, enthusiasm surrounding gear was low and consumers were wary of buying clubs at full price because they had been conditioned to expect rapid discounting.
There were a handful of ultra-premium clubmakers selling product in the U.S., but they had little traction.
In that environment, Parsons, a former Marine who became a billionaire after founding GoDaddy and then selling a majority stake in the company, saw an opportunity to zig while others zagged. He told his designers to make the best clubs they could and not to worry about price constraints. He believed there were enough deep-pocketed golf lovers to sustain his new, ultra-premium club business.
His proof of concept has become a wide-reaching trend. Ten years from now, when golfers recall 2017 and start talking about equipment, they can say it was the year ultra-premium equipment became a legitimate – and widely coveted – part of the industry.
“PXG has livened the ultra-premium market again, and all the other guys are (upset) because that used to be their golfers,” said Tom Olsavsky, Cobra’s vice president of research and development. “So now they are saying, ‘We can do that as good as (PXG) can,’ and we’re seeing them offer expensive irons and expensive drivers. Fifteen years ago that was the after-market business, and they made tons of money because it was a better product and people were willing to pay for it.”
Big money spent for these clubs
In 2017, Callaway released the Epic and Epic Pro irons priced at $2,000 for an eight-club set, as well as the Epic Star driver, which retails for $700 and was previously available only in Japan. XXIO brought the $850 Prime driver to the U.S. market and said there was plenty of demand for it, while Titleist re-released the C16 iron set for $2,700 and debuted the J.P. Harrington line of custom-fit wedges for $500 each.
Those clubs are popular in a lot of big cities with high concentrations of wealth such as San Francisco, New York and Dallas, but ultra-premium gear is moving well in other locations, too.
Chris Cote’s Golf Shop operates in four locations in central Connecticut, the largest a modest-sized store in Portland about 10 miles south of Hartford. Cote has been in the business for 10 years and started carrying PXG late in the summer of 2016.
“I think we’ve sold about 60 to 70 sets of (PXG) irons this year alone, which has been pretty amazing,” Cote said. “It totally blew away my expectations.”
He added that he has been very pleased with sales of Titleist C16 irons and that he has had golfers drive more than an hour from places such as Darien and Greenwich, Conn., and from Rhode Island to get fit for these clubs.
5 Items of Note in 2017
And while the prices can be eye-opening, Parsons said that focusing solely on the hefty price tags for ultra-premium gear misses the point.
“The equipment had better perform,” Parsons said. “It isn’t just the high price on something. It’s putting a high price on something that delivers.”
Some industry insiders believe that when the golf world contracted in the late 2000s, too many equipment companies mimicked the airline industry and focused on price matching. That cut into everyone’s margins and profits.
The growth of ultra-premium offerings has helped the industry break out of that trend. The industry has seen that if performance wows consumers, there will be golfers who are willing to pay more for it.
PXG’s numbers appear to bear this out. Parsons said PXG made $38 million in sales in 2016, and in mid-2017 he projected PXG would make $100 million in sales and be profitable by the end of the year.
“As long as we continue to honor our brand and do the things that we can to reflect what it is supposed to be, and never fall prey to allowing a compromised product to reach the market, I think we’ll be just fine,” Parsons said.
And PXG certainly will not be alone going forward in the ultra-premium golf market.
(Note: This story is one in a series reviewing the year in golf. It appears in the November 2017 issue of Golfweek.)