Retailing: Nevada Bob plays his ace in the hole: A pile 'em high purveyor of golfing gear is here to conquer Europe
Sunday 29 May 1994
Bob - nobody calls him Mr Elton - puts the problem down to moving away from the basics. Nevada Bob's is fundamentally a franchise operation, so the former managers of the European business went wrong by having half the stores company-owned and becoming too involved in areas such as distribution when they should have been concentrating on development.
When this situation led to a showdown with lawyers, accountants and other advisers at the end of last year, Bob picked a small management team and moved to London 'for as long as it takes' to put the operation back on the tracks.
Assisting him in the functional offices behind the main store in London's Broadgate Centre are three executives - the managing director, Ivan Norman, franchising expert Phil Smith, and finance director Margaret Delaney, a veteran of several retail turnarounds.
Additional assistance comes from Andy Pollock, a chartered accountant who has considerable experience in franchise financing.
So far, they appear to be pulling off the trick. The business now has eight stores in place, and by July this will have grown to 15. Probably more important, daily turnover at the Broadgate store has risen from about pounds 1,800 in December to pounds 5,500. 'And it keeps going up,' Ms Delaney said.
The first European operation also went wrong by departing from the basic no-frills philosophy of Nevada Bob's. It had installed expensive signage and the latest point-of-sale technology which, combined with the relatively high cost of property compared with the US, pushed up the entry cost to pounds 300,000.
Now adjustments have been made and the entry cost has dropped to between pounds 170,000 and pounds 190,000. With a possible annual turnover of pounds 1m, this makes the proposition much more attractive, says Bob. He even reckons it is possible to repay the investment in not much more than a year.
The four principles that have helped Nevada Bob's to achieve a worldwide international turnover 'conservatively estimated' at dollars 400m ( pounds 600m) are 'quantity, quality, service and price'. And in line with this approach, recent months have seen marked changes in the London store.
Where previously there was open space there are stacks of balls, clubs and what Bob calls 'textiles' - the often gaudy trousers and jumpers loved by golfers the world over. What little open space is left is now devoted to a putting green and a driving range.
Bob claims not to mind whether customers use these two facilities to try out clubs they are thinking of buying or just to while away the lunch hour. Once they are enticed in, they will find it difficult to leave without buying a set of balls.
A former club pro before he set up in business under a moniker he insists was his wife's idea, Bob is reluctant to upset the traditional purveyors of golfing equipment. Nevertheless, he concedes that the golf business has changed considerably in the three decades he has been involved in it.
Until the early 1970s, about 85 per cent of US golfing purchases were 'green grass', or on the course, with just 15 per cent 'concrete', or off-site in department stores or specialist shops like his. Now those proportions have been almost exactly reversed.
Since his 'pile 'em high, sell 'em cheap' policy has put him so far out in front of the competition in geographical spread that he claims that 'nobody is even close to being second', he can be held at least partly responsible for this.
With the same trends under way on this side of the Atlantic, there is huge potential. The only limiting factor is that for all the sport's visibility on television, less than a tenth of the population of the main golfing countries of the US, Japan and northern Europe play it.
But this in itself is a challenge. Bob, who is now 62, is convinced that enthusiastic selling can make his operation a success.
Claiming that its appeal to 'established' middle-aged people makes it largely recession-proof, he reckons that his expert staff can sell to any price range, from pounds 59 to pounds 1,500.
'The most important thing is to make sure it suits you and your price range, and improves your golf,' he said.
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