Remember the growth in golf-related stores, such as Golfsmith and Golf Galaxy?
Maybe that expansion was a bit optimistic, given Dick's Sporting Goods' second quarter conference call. The company posted terrific numbers, with comp-store sales increasing 3.2 percent, above its guidance. But the growth came from the sporting goods side, which increased 4.1 percent, offsetting a 9.3 percent decrease at Golf Galaxy. If you exclude hunting, too, sales rose 7.8 percent.
“Golf continues to be our most challenging business,” said executive chairman and CEO Edward Stack. “Golf from a participation standpoint is in a structural decline and we don't see that changing. We'll continue to see golf as a smaller and smaller percent of our business.”
Millennials, it seems, don't play golf, according to a recent Wall Street Journal article . It's pricey, takes hours to play and years of practice to play well, and probably suffers from the image of being something your grandpa did before the video game era. Today's young adults are focused on cycling (which you can do in larger groups), running, triathlons and the like.
Which may leave golf retailers scrambling. At Dick's, floor space and dollars have been reallocated from golf items to women's apparel, and teen and youth sports, and the company is consolidating administrative functions, laying off more than 400 golf pros. The company plans to open just one Golf Galaxy store this year, even as it plans 46 new Dick's units and eight Field & Stream stores for all of 2014.
Some 63% of Golf Galaxy's leases will come due over the next three years, so expect a few to close or be relocated.
“We're still being cautious,” Stack said. “We have a lot of flexibility with what we're going to do.”
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