Going for the Green

EXECUTIVE SUMMARY

Company: In Celebration of Golf, in Scottsdale, Ariz., a specialty retailer with one 13,000-square-foot location.

Concept: Build a one-of-a-kind, high-end store to attract golf addicts as well as their gift-seeking families and friends.

Projections: Revenues of $3 million in 1996, with a pretax profit of $298,000; revenues of $3.6 million in 1997, with a pretax profit of $774,000.

Competitive advantage: A high level of service and the owner's ability to source hard-to-find merchandise

Hurdles: Tracking -- and moving -- a varied and extensive inventory containing some high-ticket items that will wait a long time for the right buyer.

THE FOUNDER
Age: 51

Family: Married, one daughter

Education: B.A. in marketing, Oklahoma State University, 1967

Personal funds invested: $1 million

Equity held: 100%

Salary: $125,000

Previous job: Vice-president, Marriott Golf; oversaw 23 U.S. golf facilities grossing $65 million a year.

Affiliation: Member, Professional Golfers' Association

THE FINANCIALS

Expenses

TEEING UP TO A GROWING MARKET

Golfers over 50 years old play an average of 38 times a year.

Golfers under 50 years old play an average of 15 times a year.

Golfers over 50 years old spend at least 50% more on equipment and apparel.

Someone turns 50 every 8.4 seconds; by 2000 that will happen every 6.8 seconds.

MERCHANDISE STRATEGY

What's So Special About This Store?
SELECTION: A glance at the store's interior suggests that if it has to do with golf, it's somewhere in here.

MUSEUM EXPERIENCE: Fifteen green Masters blazers hang in the faux locker room.

OFFTHECOURSE: The store offers golf-themed home and office furnishings for die-hard golfers.

UNUSUAL GIFTS: The typical golf pro shop won't carry items like this 'History of Golf' chess set.

WHAT THE EXPERTS SAY

Jesse Faulkner
Founder of Boston Links Golf Shop, a golf retailer with two locations in Boston
With such a broad inventory, you end up with too much stuff that can't be sold at good margins. Maxwell has to get to know his customers so he can carry less but carry the prime beef. He also has to be conscious of what he really sells his goods for. Selling art, for example, eats up a lot of your time. You end up being like a design consultant -- but not getting paid for it. He's also not in the entertainment business, but people will come to see his large museum-quality rooms and hang out there. Someone has to pay the air-conditioning bill. If he's not charging admission, then he has to be conscious of being a retailer. That means valuing every square inch of space in the store. Right now, he has got all these extra little costs, but I don't see the extra profits that will pay for them.

Stuart Lucas
President and CEO of Golf America Stores, a retail chain selling golf apparel, equipment, and memorabilia, based in Rosedale, Md.
It's a great concept, but it needs fine-tuning. Maxwell needs to computerize the back end of the business as soon as he can. He needs to have his computer system track sales by color, by style, and by size on a real-time basis. Max- well needs to have good tangible evidence through his computer system of what the customer is telling him, so he knows which vendors shouldn't be in the store and which should have more space. The other question is how he will expand a concept like this. He's built a one-of-a-kind destination store, and that's a constraint.

Adam Barr
Business editor of Golfweek, a leading industry trade publication in Orlando
Maxwell's strategy is fascinating because he's combined a tourist destination with an upscale retail operation in a location that clearly lends itself to the right kind of traffic. What concerns me is his affection for terms like sizzle and feel. The novelty will wear off. Good repeat customers are not looking for that. Furthermore, I wonder whether he can roll out smaller versions of the store with the same intensity and feeling he's achieved in Scottsdale.

Walter F. Loeb
President of Loeb Associates Inc., a retail consulting firm in New York City
To grow beyond one location will be hard because Maxwell needs to replicate himself and his salespeople, who presumably have unique talents. He must concentrate on stocking more of what customers are buying than on having the broadest assortment possible. He should also focus on doing one thing well rather than having many things under one roof. And, unlike a sporting-goods store, which can sell skis in the winter and swimwear in the summer, ICOG has no seasonality built into it. Maxwell must find some way to attract the same customers again and again. Retail concepts survive on a sense of novelty and surprise.