ORLANDO — When Golf Town CEO Stephen Bebis left Golf Town just over a year ago, the Ontario Municipal Employees Retirement System (OMERS) wouldn’t comment on the matter as you can read here, leading to much speculation within the golf industry about what actually led to his departure.
Likewise, there is similar speculation about the plan to move the off-course retail giant to Austin, Tex., later in 2013 after Golf Town purchased American retailer Golfsmith, which you can read about here, last year.
There have been talks about the possibility of harmonized pricing between the United States and Canada, or the new entity being forceful in what it expects from its vendors, many of which remain calm, adding that anxiety has eased since the move to Austin became known.
The initial anxiety was understandable since it’s believed that Golf Town accounts for an estimated 70 per cent or more of off-course business in this country across the board, with the percentage varying from company to company.
“The reality is there wasn’t one item that was really causing the angst,” said one industry source.
“We do obviously care about the people at Golf Town. We’ve had great relationships and we’ve all had great success together, so to see some of them potentially not continuing with the company is emotional for us because we deal with them every day,” the source added.
“We’re just learning to work with each other, figuring out what they’re after and they’re figuring out what we stand for and the reality is that we’re making some headway now,” said the source.
“The integration was a shock for everybody and the swiftness of how quickly things were happening caught a lot of people off-guard, but I think we’re all over that now. We got past it and now, we’re working in a better environment,” the source said.
“Anxiety comes with change and change brings anxiety. Human nature is to think it’s worse than it really is, but the reality is they’re going to look for the efficiencies (of two operations) in one,” said the source, adding that anxiety has eased.
“There’s obviously going to be some hiccups. There haven’t been any serious issues with telling us what to do on programs. They’re not accused of that per se, but they’ve asked questions about why things are the way they are. Fair to ask, right?” said the source.
Another source says it’s too early in the game to see how it all shakes out, but he says the new combined entity does know from its discussions with various companies the value of Canada as a distinct market, adding that it will keep a marketing/sales team here.
“They’re keeping an eye on Canada, That business is a very profitable one for them, a sizeable business. I don’t think they want to let their guard down,” the second source said, adding that a difference in pricing between the two countries is a good example.
“Canada’s a different country and there’s different legislation, different ways of doing business. There’s a cost to doing business in Canada that makes it far different than in the U.S.,” added the second source.
“The only way to cultivate the business is to actually be in the country, understanding how the marketplace works, how the consumers think. There are a lot of intricacies involved with running a business in Canada vs. the U.S. vs. the United Kingdom vs. China,” said the second source.
Another source agreed.
“That’s just the reality of our marketplace, so I don’t see pricing changing. I think Golfsmith would have liked to have seen more harmonization of pricing, but it’s not possible” said the third source.
“It’s more expensive to do business in Canada with wages, transportation, real estate, distribution, tariffs. It adds up,” he said.
Like the first source, the other two believe the initial trepidation is over and add that ongoing talks are constructive.
“It’s mutual,” said one. “They’re willing to listen. A lot of us belong to larger global companies and this is the way we operate in every region around the world,” said one. “We have head offices located in hundreds of countries around the world.”
The other agrees that recent talks are constructive.
“The one thing that I’ll give Golf Town and Golfsmith credit for is their open lines of communication. They’re really transparent on what they’re doing and they inform you as much as they can when they can,” he said.
Good plan. Past history shows us the speculation and trepidation that results from not being transparent.