Dick's cuts PGA professionals as golf business declines
Dick's Sporting Goods has laid off hundreds of PGA professionals who provide golf instruction in its stores, underscoring the company's concern about sagging sales of equipment and accessories as fewer Americans show interest in hitting the links.
The layoffs were not announced by the Findlay-based retailer but were confirmed by the PGA of America, which said Wednesday that 478 of its members were notified by the company that their services were no longer needed.
Dick's, which operates more than 550 stores nationwide, did not immediately respond to email and phone messages. A PGA spokeswoman said it was disappointed in Dick's decision and had reached out to the people affected.
“We are extremely disappointed by the news, as any time even one PGA member loses a job, we are extremely sensitive to such matters,” PGA spokeswoman Jamie Carbone said in an email on Wednesday.
Dick's sought to differentiate itself from competitors by hiring PGA professionals to offer in-store expertise, but lately the company's profits have been undercut by declining sales in its golf business.
Speaking to analysts in May, Dick's CEO Ed Stack said the golf business fell below the company's first-quarter sales expectations by $34 million, adding that “we don't feel we've found that bottom yet in the golf sales number.”
The company reduced its expected year-end profit as a 10.4 percent drop in sales at 79 Golf Galaxy stores muted gains in apparel, team sports and footwear. Golf Galaxy is a separate brand of specialty golf stores operated by Dick's.
The PGA professionals at Golf Galaxy remain employed, according to Matt Trimbur, a PGA professional at the Golf Galaxy in Robinson Township. Only those working at Dick's Sporting Goods stores were laid off.
“We had some internal restructuring that affected the Dick's stores,” Trimbur said on Wednesday, referring all other questions to the corporate offices.
The PGA professionals offer more value to Golf Galaxy than a general sporting goods store like Dick's, said Jim Koppenhaver, president of Buffalo Grove, Ill.-based Pellucid Corp., a golf business analyst. Golf Galaxy attracts discerning customers who want expertise beyond “the high school kid on the golf team,” he said.
Still, the PGA pros are trained more for instructing golfers on how to improve their game, not sell drivers, raising questions about how much the golf pros could contribute in retail, Koppenhaver said.
“I value them for instruction and playing abilities,” he said. “I don't necessarily value them more for helping me pick out a better piece of equipment.”
Steady declines in golf participation are pressuring the golf equipment industry to adjust, Koppenhaver said.
Adidas blamed declines in first-quarter profits on slackening demand for its TaylorMade golf products. Revenue at TaylorMade fell 34 percent in the first quarter, the company reported.
Dick's is TaylorMade's largest retailer and bought all four models of the driver TaylorMade released last year. However, the long winter kept players off golf courses and contributed to a glut of inventory, forcing Dick's to sell below the suggested retail price. This spring, Dick's sold drivers for $99 that 20 months before were $299, Stack said.
It's not just weather that is hurting golf equipment sales.
The number of golfers dropped from 30 million in 2002 to 23 million in 2013, Koppenhaver said. The trend has continued this year, as the estimated number of golf rounds played nationwide fell 1.9 percent through the first five months of 2014 compared to the same period last year, according to the National Golf Foundation.
The game has failed to catch up to shifting consumer tastes, Koppenhaver said, particularly among younger people. Consumers want accessible recreation options that are easier to learn, lower-cost and less time-consuming than golf.
“The industry has got to find a way to change with the times or we're going to continue to see these declines,” he said.
That golf holds little appeal for the younger generation is not surprising, said Don Marinelli, a retired Carnegie Mellon University professor who has studied the so-called millennial generation, generally defined as anyone born after 1980.
“(Millennials) are a very social demographic, and golf is not the most social game,” Marinelli said. “It's four guys going out and playing as individuals. It's like a solitary game that we play together.”
Others disputed that Dick's problems could be attributed to declining interest in the sport.
Dick's main issue was poorly managed merchandise, said Frank Hamschin, general manager of South Hills Country Club.
“They came out with four new drivers last year,” he said. “You spend $400 on a driver and something comes out new and improved three months later, and you're not going to spend $400 again. It's more a product of the fact they're trying to keep up with what's new, bigger and better, and they're overloading with merchandise.”