After buying his former golf catalog, Austad’s, back from bankruptcy court in November, Dave Austad has put the book in the mail once again.
The Sioux Falls, SD-based cataloger in April mailed nearly 400,000 books to house file names. As of early May, Austad was pleased with the response (“I get 30-40 e-mails a day from customers saying that they’re happy we’re back”), although it was too early for hard results. He’s projecting a $120 average order size and a 2.5% response.
Austad’s father launched the catalog in 1963. Dave Austad sold 70% of the then-$50 million catalog to multititle mailer Hanover Direct in 1995, later selling Hanover the remaining 30% as well. Austad continued to own and operate the eight-store Austad’s retail chain.
Hanover sold the catalog in late 1999 to online merchant Mammoth Golf. Then this past October, Mammoth filed for bankruptcy and liquidated its assets in bankruptcy court. Austad bought back the catalog rights, along with the mailing list and the Website.
The more things change…
This go-around, Austad is licensing out the catalog business to Wichita, KS-based Internet marketing company TGW.com. TGW, which stands for The Golf Warehouse and has its own online catalog business, is handling all business functions, including mailing, production, and fulfillment. Austad’s is handling the creative inhouse, however, and is retaining the consulting services of Shawnee Mission, KS-based J. Schmid & Associates.
“Austad’s is sitting on a lot of names from the old file that were mailed before we could get the full explanation of [database] fields from Hanover so that we could perform a full RFM segmentation of the list,” says Phil Minix, executive vice president/general manager of J. Schmid. “So the challenge will be to see if these customers are still devoted to the Austad’s brand.”
Austad has found that the catalog market has changed significantly in the six years since he sold the Austad’s book. For one, Austin, TX-based competitor Golfsmith has nearly doubled in size during that time, to more than $150 million in catalog sales. It is also building up a chain of 28 stores.
“Golfsmith certainly has been aggressive,” Austad says, “while we’ve lost image and market share. It will take some work to get [the market share] back.”
On the other side of the coin, another significant competitor, discount cataloger GolfDay, was discontinued in 1999. Its struggling parent firm, Trendlines, had put it up for sale but found no takers.
But contrary to what many believe, the golf market hasn’t mushroomed in recent years. “Everybody assumes that golf is an exploding market based on what Tiger Woods has done for it,” Austad says. “But that hasn’t transcended to a massive number of people getting into the game.”
In fact, Austad points out that the number of golfers in the U.S. has remained between 26.5 million and 29 million for the past decade. “We can get people playing the game, but it’s hard keeping them in it. So its a tough time for us to reinvent this business. But then again, with almost 40 years in the business, we feel we have a good shot at it.”