Interview With The CEO: Golfsmith International Holdings, Inc. (GOLF) - Martin E. Hanaka
September 7, 2011 - The Wall Street Transcript has just published Retail Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
Recent Wall Street Transcript Special Reports.
Martin E. Hanaka became Chairman of the board of Golfsmith International Holdings, Inc., in April 2007 and Chief Executive Officer in June 2008. He was the Chairman of the board of The Sports Authority, Inc., from November 1999 to June 2004 and was its CEO from September 1998 to August 2003. Mr. Hanaka joined Sports Authority as Vice Chairman of its board of directors in February 1998. Previously, he was President and Chief Operating Officer of Staples, Inc., and a Director from August 1994 to October 1997.
TWST: Would you give us a bit of a thumbnail sketch, a little historical background on Golfsmith International Holdings and then bring us up to date?
Mr. Hanaka: Golfsmith International (GOLF) has been in business for 44 years this year. We started off as a club-making business for custom club makers throughout the country. We evolved to a catalog business and went beyond club making into the consumer products area in the golf industry. Then Golfsmith entered into the retail business in the late 1990s and also launched its Web business. So we've moved from club making to catalog, to retail, to Web, and now we are a complete multichannel golf retailer and the largest in the United States.
TWST: You have 75 retail outlets in 22 states and now a new facility in the nation's capital with plans for 14 more stores during the next two years. What is the growth formula at this point?
Mr. Hanaka: Actually as of today, we are at 78 stores and we've opened three stores this year. We have a fourth planned for November in Florida, so we will end the year with 79 stores. And yes, we announced at our recent earnings call that we will open 10 more stores next year. So we have a lot of confidence in our new store model. We've built a predictive sales model, and we really understand where our target customers live and work and shop. We bring a real interactive, rich, activity-based environment to the golfers, so they can try out any club they want. We custom-fit golfers, which helps them play better. Custom-fitting is a critical part of our retail growth strategy. The second growth area is our Web business. We will aggressively continue to cultivate the Web through a combination of technology improvements, merchandise product extensions and better service in inventory placement. The third growth area is to shift our mix and enhance our margins. We can do this by growing our apparel business, and we've had good results. Over the last two years, we've moved our mix in apparel from about 15% of the business to 19% of the business. We have targeted 25% of our store will be in the important apparel categories and footwear, which are margin enhancers for sure.
TWST: Earlier this year, the company announced plans to expand into Australia and New Zealand, establishing a license and distribution deal with Walkinshaw Sports. What's the overall retail landscape and competitive landscape potential for Golfsmith Down Under?
Mr. Hanaka: We won't be opening stores Down Under anytime soon, but we recently announced we will soon introduce our first retail operations outside the U.S., in South Korea, the fastest-growing golf market in the world. A new agreement with Golfzon Co. is another step in Golfsmith's global strategy aimed at forging partnerships around the world as the company continues to leverage its brand assets internationally. Golfsmith will reinvest the income generated from this new partnership back into its core U.S. business, where the company continues to gain momentum and market share.
The remainder of this 45 page Retail Report can be immediately viewed by purchasing online.
The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.
For Information on subscribing to The Wall Street Transcript, please call 800/246-7673