Who’s In Charge Here?

The trend continues to take shop ownership away from head golf pros and bring it into the general management fold. But notable exceptions remain to the question of who should rule over retail.

by Taylor Wright (editor@clubandresortbusiness.com)
October 2007
 

Summing It Up • More clubs are taking over shop ownership to streamline management, leverage purchasing, improve control of pricing, and minimize risks. • Clubs also see value in assuming club ownership, to let head pros focus on servicing existing golfers and developing new ones. • Where head pros still own the shop, good business and leadership skills are a must, in addition to golf and product knowledge.

For many years, owning the pro shop was as basic to the job description of a club or resort’s head pro as giving lessons and telling good golf jokes. But industry polls (such as the one recently conducted at this website [results below]) continue to confirm a growing trend toward bringing the ownership and management of the golf shop (as well as tennis, pool and other retail outlets, including online sales) into the same fold as membership, food and beverage, and all other parts of the operation.

There are several reasons why more club and resort properties are deciding that this makes sense. Primarily, club ownership is seen as a cleaner arrangement that ties in better with the overall need to operate all aspects of the property as a single business entity. Also, when the club owns the shop (particularly when golf management companies or other larger corporate entities are involved), more purchasing power can often be exercised, to take better advantage of vendor discount programs and reduce the risk that an individual owner must bear when trying new merchandise or carrying inventory. Properties’ financial managers can also have better control of the pricing and overhead costs involved with shop operations.
But clubs’ reasons for owning the shop aren’t always self-serving. They often include considerations for the golf pro, too, by offering better security and comfort through salaries and benefits, and by eliminating the need for the pro to invest personal funds or get immersed in hiring and other personnel issues.

With rounds no longer growing and a greater emphasis now being placed on servicing existing golfers and developing new ones, taking away the burden of shop management is also felt to be a better use of pros’ talents and experience.

Head Golf Pro Mike Tucker sold the pro shop back to Bellerive CC two years ago, after 10 years as a co-owner.

A Switch That Pays Off
At the private, 110-year-old Bellerive Country Club in St. Louis, Mo., which has hosted U.S. Open, PGA and U.S. Senior Open championships, Head Golf Professional Mike Tucker has experience both owning the golf shop and then continuing to run it after selling it back to the club. Tucker has been in the golf business for over 20 years, and spent 10 of them owning Bellerive’s pro shop. But two seasons ago, Tucker sold the shop back to the club, after his partner left the club and Tucker assumed the head pro position.

Craig Surdy, Bellerive’s General Manager, said the club approached Tucker about selling back the shop for most of the usual reasons: tidier management, more control of the shop’s look and layout to better match other parts of the property, and freeing up Tucker so he could focus on other aspects of golf operations and member service.

A desire to wring more profits out of the shop, though, was not a key driver of the offer, Surdy stresses. “It didn’t matter to us financially,” he states—and, he adds, the club took steps to make sure it didn’t matter to Tucker, either, working out a salary arrangement in line with what he was making for himself as a shop owner.

The main advantage of now having the shop under club ownership is the amount of money that can be spent on it, both managers say.  “I never could have renovated the shop when I owned it,” says Tucker. A recent club-funded upgrade of the 900-sq. ft. shop is being given much of the credit for the fact that with a month left in the peak season, projected sales for 2007 had already been surpassed. But otherwise, both Surdy and Tucker say, nothing has really changed, and that is how they both wanted it to be. “We wanted it to be seamless,” says Surdy.

Notable Exceptions
While club-owned shops are becoming more prevalent throughout the industry, it’s not hard to find examples of pro-owned outlets that are not only still existing, but thriving—and where the property’s ownership and management is just as happy about the arrangement as the pro.

Not too far from Bellerive, at the St. Louis (Mo.) Country Club (SLCC), Head Golf Professional Steve Spray has owned the shop for 32 years—and neither he, nor the club’s management, expects that arrangement to change.

Jeff Roderick, interim General Manager, has been at the club for 24 years, spending 20 as Clubhouse Manager before assuming the general manager role earlier this year. So he’s been at SLCC long enough to see that the club’s arrangement works well.

“With a pro’s expertise in retail, marketing and understanding trends, plus their invested interest and financial incentives, it benefits the club, and him,” Roderick believes.

Roderick does acknowledge that, as in all other parts of club operations, being a successful pro shop operator calls for special traits that go beyond just knowledge of the sport and its related products.

“It takes more than being a professional athlete to run a successful pro shop,” he says.  “You have to be an excellent businessman, and good people skills, with both members and staff, are essential. You have to be a good manager and leader.”

Steve Spray has proved to be so good in all aspects, Roderick notes, that he also owns the club’s golf carts—“a unique arrangement to many clubs,” Roderick says. Spray also employs all assistants, and the club provides insurance and meals for the group.

Bellerive’s shop sales are ahead of budget, and a club-funded upgrade is being given much of the credit.

All-Purpose Service
From Spray’s perspective, the success of the arrangement hinges on good service, which he says has always been “my number one-goal.”

His pro shop features several aspects of service not found at all clubs. Spray believes in golf professionals being well-trained in all aspects of the golf business, from pro shop merchandising to golf cart maintenance. His training regimen for assistants even includes tearing all wiring and parts out of golf carts during the offseason and giving them a thorough cleaning and rebuilding. All club repairs are done on-premise in a special room, making it possible for the club to be returned the same day if needed.

Spray also keeps members close in mind when buying merchandise for his shop. “Sales reps come and say, ‘Everyone’s buying it, everyone’s selling it’—but we’re not everyone,” he says. When considering new merchandise, the SLCC staff tries to think of three or four specific members who they feel might like a particular item—and won’t commit to buying until they can make enough mental sales.

Spray says SLCC has also been very successful moving away from traditional golf shop merchandise. His shop carries everything from ties, belts, and flip-flops to handbags and luggage. “Members like the convenience of shopping here,” he says.  “They don’t have to go to the mall, and they can charge it to their club accounts. We give them what I consider to be extremely good service.”

Spray’s operation has benefited from new stand-alone space (1,700 sq. ft.) that the club provided in 1999 as part of an overall property upgrade.  “[The old shop] was outdated and we outgrew it,” he says, “We needed everything we didn’t have.” The club told Spray it wanted to build new space for the shop that would never have to be enlarged. So Spray worked with the architect to design and tweak a plan that has worked well since it opened. 

Now, Spray has new, rent-free space, and the club also pays for utilities, maintenance and a portion of the golf employees’ benefits. Spray owns the shop's merchandise, the club’s golf carts, and pays the salaries and remaining benefits costs for the golf employees.

Not surprisingly, Spray says he’s still “a big believer in the pro owning the shop—it’s good for him and the club.” His operation is a strong example that the concept can still be quite viable. But Bellerive CC, and other properties where a transition has been made, show that club ownership is a workable approach as well. In the end, the success of a pro shop will ultimately hinge on the time and thought that’s consistently put into it, no matter who’s in charge.