Golfsmith Handicaps Promotion of Free Clubs

Retailer to Refund Consumers Who Buy Taylormade Clubs if Garcia Wins Masters

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NEW YORK ( -- Golfsmith's got a gimmick: The golf-equipment retailer is running a nationwide promotion, advertised in print and on TV, promising to refund consumers the amount of money they pay for a TaylorMade driver if Spain's Sergio Garcia wins The Masters next month.

Sergio Garcia appears in a Golfsmith ad that promises a refund to consumers who buy a TaylorMade driver if he wins The Masters.
Sergio Garcia appears in a Golfsmith ad that promises a refund to consumers who buy a TaylorMade driver if he wins The Masters.
There's no catch. If you head to one of Golfsmith's 73 superstores across the country, go online ( or call toll free to purchase one of three new drivers from Adidas-owned TaylorMade by April 11 -- the R9, the r7 Limited or the Burner 09 -- you can fill out a form and have the purchase price fully refunded by Golfsmith if Mr. Garcia wins The Masters.

And these drivers aren't cheap. They're top-of-the-line clubs; one sells for $299.99, the other two are $399.99. Simple math dictates that for every 3,000 or so drivers sold, Golfsmith stands to lose $1 million.

Highly unlikely
Except that's highly unlikely. For one, Mr. Garcia, while a multiple PGA Tour and European Tour winner, has never won one of golf's four "majors" -- The Masters, the U.S. Open, the British Open and The PGA Tour Championship. Mr. Garcia is 0-for-41 in those four tournaments during his career, prompting the golf press to dub him the best player never to win a major. (Still, Matt Corey, senior VP-marketing and business development at Golfsmith, said the marketer isn't taking any chances: It purchased an insurance policy against the odds of Mr. Garcia winning The Masters and so will not be giving away millions.)

"It's a bit of a safe bet for the company. Of the four majors, Garcia has been least effective in The Masters," said Jim McCabe, columnist for GolfWeek magazine. "It would be nice if Golfsmith/TaylorMade would be a bit bolder and offer the free deal if Sergio wins any major in 2009. But I give them credit for a campaign that has some positives to it."

Instead, the promotion aims to pump up golf-equipment sales, for Golfsmith and for TaylorMade, the second-largest golf manufacturer in the world behind Callaway.

Golfsmith suffered a 17.3% decrease in same-store sales in the fourth quarter of 2008 compared to the prior-year period, leading to an overall decrease of 2.3% in revenue for 2008. Callaway was forced to lay off 164 employees last September, while TaylorMade is reportedly downsizing by 170 positions over the course of 2009.

Getting in on the buzz
TaylorMade, however, is not part of the promotion and is not on the hook for refunding any monies should Mr. Garcia win The Masters. "The involvement from our side is strictly just providing the athlete as an asset for Golfsmith to use in their promotion," said spokeswoman Christa McNamara. "We definitely feel that this promotion will help draw some buzz around TaylorMade equipment, and even though the industry is down in sales, TaylorMade is seeing record [sales] numbers for our new R9 driver." Ms. McNamara, however, declined to provide sales figures for the driver.

Overall, data from shows sales of golf clubs, balls, bags, carts and accessories including apparel, footwear and gloves has dropped from $6.8 billion in 1996 -- the year that Tiger Woods made his professional debut -- to $6 billion last year.

Tom Stine, co-founder of the Orlando, Fla.-based consultancy Golf Datatech, said that's partially misleading. His company tracks the sales of "hard goods" in golf (no apparel, no accessories) and said that while sales of clubs and balls fell 5.4% to $2.8 billion in 2008, that followed a record-setting year of $2.95 billion in sales in 2007. The $2.8 billion last year, he said, ranks third all-time in terms of sales of golf hard goods.

Mr. Stine did note, however, that the number of rounds played last year on the more than 4,000 courses in the U.S. was down almost 2% from 2007, another bellwether figure that doesn't bode well for the sport.

(And that's just for the amateur duffers and hackers out there. The PGA Tour and LPGA Tour are both suffering, with the ladies' tour having lost four events off its 2009 schedule because of a lack of sponsorship.)

Still, Mr. Stine believes the promotion will "get lots of buzz. It'll be something if [Golfsmith] has to refund all that money on drivers purchased, but it creates something neat for the consumer and it will be in exchange for a hell of a lot of advertising and goodwill."

Goodwill, indeed. Golfsmith appears to be more than generous with the rules surrounding the promotion. The Masters begins April 9 and ends April 12. The promotion doesn't end until 11:59 p.m., central time, on April 11. Conceivably, golf fans could chart Mr. Garcia through the first three rounds of The Masters and, if it appears he is in position to win, could rush out on Saturday evening and purchase one of the three drivers in order to qualify for the deal.

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