Golf sector suffers in slow economy

With golf club memberships falling, is the closure of BLEC a sign of things to come, asks Matthew Appleby.

The golf sector has taken a double hit as poor weather led to decline in memberships - photo: HW
The golf sector has taken a double hit as poor weather led to decline in memberships - photo: HW

China's Mission Hills Golf Club - the world's largest - is cutting at least 20 per cent of jobs as the slowing economy cuts into leisure spending. The Shenzhen-based club in southern China, which has 10,000 employees running its 12 courses, won't renew contracts that expire this year.

The story is being told across UK golf clubs, albeit at a slower rate of decline.

Lincolnshire-based maker and supplier of turf-care equipment BLEC went into administration late last month. Owner Gary Mumby would not talk about what went wrong, but the declining export market, hit by exchange-rate problems and coupled with over-ambition in a crowded market, is believed to be behind the collapse.

BLEC rival Campey Turf Care sales director Simon Gumbrill says: "Two weeks before BLEC went down, I went away. I came back and MFI, Woolworths and BLEC had gone under. I did feel the despondency. But it's the weather as much as the credit crunch.

"In the golf market, people are reluctant to join clubs after a couple of wet seasons. They've not played enough times to justify membership.

"BLEC shocked us. Perhaps they were overstretched in the US. It's a shame. BLEC was competition for us but we wished them no harm. They flew the flag for Britain worldwide and we're proud of anyone who did that. It's a shame for the industry and I hope Gary Mumby gets back on his feet."

Lloyds of Letchworth managing director Clive Nottingham sympathises: "I know Gary and Sue Mumby personally so do feel for them. But maybe there are too many players in tough times.

"The market is tough and if you shake a few apples from the tree there are fewer apples to choose."

But DJ Turfcare owner David Jenkins adds: "The industry is full of nice people and BLEC was part of that. To see them go is a loss but now there's a gap in the market there."

British & International Golf Greenkeepers' Association (BIGGA) communications manager Scott MacCallum, who is running the BIGGA Turf Management Exhibition (BTME) show in Harrogate on 22-24 January, says: "Too many golf clubs have been built in the past 20 years. It's fair to say golf has plateaued." This would mean the days of golf club membership waiting lists are over.

But he adds that golf clubs still need to maintain the quality of their courses to attract players. And he says that despite the "big six" - including Ransomes Jacobsen, John Deere, Sisis and Toro - taking a year off from exhibiting at BTME, bookings are good for the show.

Cheshire-based Sisis sales manager Keith Vertigan says: "BLEC was a lovely company but they were one of the companies trying to buck the trend with big stands at IoG Saltex and BTME when others were dropping out - that's not done them any favours.

"BLEC also suffered with the downturn in export markets to courses in Europe and the US. The UK market has stood up relatively well in comparison. The exchange rate has affected things this year. It's a relatively small industry - people think it's bigger than it is. It gets hit very quickly in a downturn."

Nottingham says problems stem from the golf club sector as "people don't renew membership because mortgage payments come before golf club membership payments".

But he adds: "We're adaptable enough to deal with the market. We're not totally dependent on dealers because if dealers aren't selling your products there's nothing you can do.

"As a smaller company, you can speed up and slow down quicker. Redundancy and notice can be six months' pay. We're more adaptable to the changing marketplace than a big company."

Vertigan says: "It's going to be tough, no question about that. I agree with John Pemberton at BIGGA that there will be redundancies and problems at golf courses. Everyone realises that.

"The impact has been there for a while, even before publicity over the current economic state. It started at the beginning of the year when we realised golf courses were losing membership. Golf is the easy one to measure but the same principle applies across all sports - people will cut back."

Jenkins says golf club members who do not use their memberships, which often cost £800 a year, may be the ones who cancel and pay to play. "It will be difficult for golf clubs to maintain their membership numbers. But as for the rest of the market, who knows? It's a walk in the dark."

HOW THE SECTOR WILL COPE

- David Jenkins "Everybody has to be sensible. It's not the time for big expansions plans. People need to be level-headed. BTME will give a taste of the year to come - golf people will be very cautious with spending. I'm looking to talk to contractors and local authorities."

- Clive Nottingham "I'm optimistic about next year as I've got an increased product range. If there's business to be had, people with stale product ranges will suffer. In the 1990s when the recession hit we had stale range but I don't feel we have now. We're focusing on bowling clubs, cricket clubs and schools and colleges."

- Keith Vertigan "I hope interest rate cuts follow through. We will all have to tighten our belts and try doubly hard."

- Simon Gumbrill "We can look a little harder and work harder and find unique products - at BTME we're relaunching products from Saltex."


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