Friday, March 31, 2017

Vital Signs, march 31, 2017

     When you call yourself a “Living Brand,” as Greg Norman so proudly does, you’re essentially saying that you view yourself primarily as a commodity, as something that can be manufactured, bought, and sold. So it should come as no surprise to hear that the LB’s holding company, the Greg Norman Company, has packaged and sold a significant part of itself – a part that the LB himself once called his “holy grail” – to a subsidiary of a private-equity firm that’s previously invested in BJ’s Wholesale Club, the Container Store, J. Crew, and other high-class operations. For an undisclosed price, Authentic Brands Group has taken control of GNC’s consumer-products division, which markets all the things we now think of when we hear the name Greg Norman, namely polo shirts, wine, steaks, and sunglasses. ABG was attracted to the LB because it believes he “lives the aspirational lifestyle that proves 60 is the new 40.” The sale continues the drift that the LB has been making from the golf business in recent years. In fact, GNC now appears to be comfortable identifying itself as a “golf-inspired global corporation.”

     The United States is nowadays about 63 percent white, a number that grows smaller by the day. By contrast, the golf industry remains overwhelmingly white despite long-time efforts to make it more diverse. The population of U.S. golfers is estimated to be 80 percent white, and the corporate side of the business is even whiter. According to the 2015 edition of "The Golf Diversity & Inclusion Report," the board members of 14 “leading organizations in the golf industry” are 95 percent white, while the employees of 80 golf-related companies and trade associations are 88 percent white. The report concluded that “the face of golf resembles the face of America pre-1980.” In 2003, the National Golf Foundation published a study that was supposed to help develop “player development programs and other initiatives” to build participation among minorities (women included) because they “represent an important group for growing the game.” Those efforts have failed. Golf is stuck in the past, with no evident pathway to a more diverse future.

     Speaking of being stuck in the past, important metrics of the U.S. golf economy were fundamentally unchanged last year. Here’s how the Leisure Investment Properties Group, a division of Marcus & Millichap, summed up 2016: “Golf utilization and rounds are about the same, year over year, as are playable days. We have not made much headway, but we didn’t lose, either.” Given the struggles our industry has faced over the past decade, maybe such comments are a measure of progress. Regarding the current value of golf properties, the LIPG has concluded that prices have been “negatively influenced” by “sagging golf operations” and “outside influences,” notably the “media hacks” who’ve promoted the false notion that “golf is dying.” Gratuitous swipes aside, the data indicates that the prices of properties tracked by the LIPG were down by 4.78 percent, the first decline in three years.

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