Wilson Golf 2.0 – Rebuilding the Wilson Staff Brand

In Part I of our Wilson Series, MyGolfSpy Forum Director, John Barba, reviewed the decline and fall of the Wilson Golf brand. Today we examine Wilson’s “reboot” since 2007, Wilson’s efforts at getting its own house in order and its R&D efforts. Finally, in Part III, we’ll look at how Wilson uses its Tour Staff, and just who – and what – this iconic brand is.

Written By: John Barba

There’s a story of a guy who fell off the roof of a 20-story building. People near the windows of each floor heard him say as he was falling, “so far, so good.”

If you read business profiles on Wilson Golf dating back to the 90’s and early 2000’s, you’ll hear the same thing from Wilson management as the Golf division was falling into irrelevance…

So far, so good.

By 2006 those rosy “Wilson-is-back” scenarios finally ended, drowning in red ink: $15 million in losses against sales of $153 million. And don’t forget that irons market share: 0.6%.

Also by ’06 an entire golfing generation had come of age knowing TaylorMade, Callaway, Ping and Titleist as serious players’ equipment. Wilson?  A “game-improvement/department store” brand people gamed in the old days.

100-year-old brand or not, Wilson was officially on life support.

GM Tim Clarke launched the daunting task of rescuing Wilson Golf in ’06 by shifting focus to “pro” irons and low-compression golf balls. Products such as the Elite 50 ball, the FG59 blades and the Ci and Di series of irons helped re-establish a pulse, but it may very well have been Padraig Harrington’s 3 majors in 2007-08 that pushed the button on Wilson’s reboot into Wilson 2.0.

“All victories are cherished, but Padraig’s 3 majors in 18 months really fueled our business and elevated the brand from a consumer, media, and global golf awareness perspective,” says Clarke. At that time, Clarke’s biggest concern was whether Wilson Golf would, in fact, survive. They needed the backing of Wilson’s parent company, Amer Sports of Finland.

“From Amer’s view it proved we were making world-class products. Padraig had 12 Wilson clubs in the bag for all 3 major victories, including driver. That was extremely important for golf at that moment in time.”

Wilson 2.0: Small is Beautiful

And the next step in Wilson’s reboot wasn’t to grow. It was to actually get smaller.

“You’ve got to right-size your business model at some point,” Clarke says. “For us to deliver profits year over year we really had to get our size right to be on a scale we could afford.”

Part of that right-sizing meant punting on the Asian market – Clarke says that’s a battle Wilson can’t fight right now – and assembling a lean business unit.

“It starts with building the right team. It’s hard in a big company like Wilson to get a team that’s entrepreneurial. With Golf, I’m the president and I’m here at a photo shoot. I sign the players. It’s run like a small business and there aren’t many layers.”

And you have to go with your gut, too.

Harrington was re-signed to a long-term deal in 2008 and former US Amateur champ Ricky Barnes was signed in 2009. Wilson marketing also went all-in on the Golf Channel.

“In the beginning we were trying to validate our position in Pro golf, so Golf Channel was one spend and our Tour players were the other,” said Clarke. “If I think about it, those were probably way ahead of what we should have done. Hindsight is 20-20 and there’s no magic formula in golf…[these] were my gut calls.

“I couldn’t validate why I did it. I’m just saying as a consumer, if I was going to get back to playing Wilson, those would be the two things I’d want to see.

Clarke says Wilson’s premium iron market share is now approaching 3% – barely a blip on the radar perhaps, but a slow, steady improvement from the 0.6% share of 2006. And in the current golf economy, Clarke says slow and steady isn’t such a bad place to be.

“You don’t get the hockey stick growth curve, but you are growing steadily,” Clarke adds. “At the end of the day we’re a publicly traded company. I have a responsibility to my bosses and our shareholders to be profitable. If you want to grow quickly in this business, the only way to do it is to be unprofitable in the division, spend silly-money, cross your fingers and hope you sign the right guys and spend on the right marketing tools.”

But that “boxed-set/department store” market perception still lingers. Both Clarke and Michael Vrska, Wilson’s Director of R&D, say there’s a difference between a “changing” market perception and a “changed” market perception.

“When I say the perception’s changing, it’s not because I think that, it’s because I’m hearing that,” says Vrska. “When I tell people who I work for, they’ll say ‘oh yeah, that boxed-set brand,’ so I realize it’s not 100%…but I will argue we’re making real progress.”

Vrska adds that progress is quantifiable.

“Market share is first and foremost. Sales, profitability – those are measurable things,” he says. “Did we make money or did we not make money? Our market share was this last year, what is it now? Those things are clean, crisp and repeatable.

“But there are also anecdotal things, like when you go to a course and people say, ‘Man, are those the new Wilson irons? I didn’t think those were out yet.” I don’t go in to who I am, I just tell them I got a set of prototypes. Then they say ‘I’ve been looking forward to those.’ That’s a great thing to hear.”

Different Continents – Different Perceptions

Clarke says Wilson’s brand perception is very different in Europe, where Wilson faces the exact same competition.

“We’re the #4 iron brand in the UK, which is the 3^rd largest golf market in the world…we’re a ‘pro’ brand. There is no mass merchandising, no Wal-Marts. We’re viewed as an elite brand there.”

“In the UK…the product is the same,” adds Vrksa. “It’s not like we design a different product and sell it in the UK – it’s the exact same product. We’re competing against the exact same TaylorMade irons, the exact same Mizuno irons, the exact same Callaway irons.

“It’s not a performance issue, it’s not a look, sound and feel issue. If we can be #4 there with the same exact competitors and the same exact everything, why can’t we be #4 here? It’s just changing that perception, and it’s going to take a little bit of time”

“There were some bad decisions made (in the past) by people who aren’t around anymore,” Vrska continues. “Fair or unfair, we’re still judged by those decisions…we don’t shy away from it, we don’t say it didn’t happen. It did happen. We can’t change it. All we can do is figure where we’re at right now, what are we doing tomorrow, what are we doing next month and next year.

“We were at a 0.6% iron share (in the US) when I took over,” adds Clarke. “And we’re now pushing 3%. Is that a mountain? No, but I can tell you it’s a lot harder to go from non-existent to 3% than it will be going from 3 to 5.”

Goodbye To Wilson Branded Box-Sets?

Clarke adds that Wilson Golf is getting out of the entry-level equipment market.

“We’ve really exited that price segment. There’s no doubt that if you get too low (pricewise), it’s hard to get your price up. We’ve worked very diligently to be profitable this year while de-emphasizing and exiting a lot of low-margin, high dollar volume categories.”

Wilson is reportedly planning to remove the Wilson name from the boxed-set Ultra’s you see in department stores, but Clarke says the overall Wilson brand will always have a retail presence.

“Look, we are Wilson Sporting Goods. We’re always going to be a sports equipment company in golf,” says Clarke. “We’re not going to be Titleist or Ping.  We’re the official game ball of the NFL, and you’re going to see Wilson NFL footballs in Wal-Mart. That’s just the nature of what we do. You’re going to see the A2000 ball glove on TV on Major League Baseball games, and you’re going see Wilson ball gloves in mass market channels.”

Is The Wilson Brand Too Far Gone?

Is Wilson’s brand too far gone to ever be a “player” again?

“If I were worried about that I wouldn’t be here,” says Vrksa. “It’s certainly not 100% back, and it may never be 100%. But there are people who hate other brands, and they advertise they’re the biggest on tour.”

“If you look at our growth,” adds Clarke, “the perception is changing. The guys that think you’re doing well usually don’t say much. They don’t call you, but they love what you’re doing and they see you moving up the mountain. They’re the ones that are buying your stuff and joining your staff.”

“Does it break out one day?,” asks Clarke. “Yeah, I think it eventually does.”

Which Brings Us To The Subject of R&D…

Amer Sports, Wilson’s parent company, is a nearly $3 billion holding company from Finland that’s publicly traded on the Helsinki Stock Exchange. Amer owns such sports powerhouses as Salomon and Atomic ski equipment, Precor fitness equipment as well as hiking, mountaineering and biking equipment manufacturers. Wilson makes up Amer’s “Ball Sports” division.

A review of Amer’s 2013 Annual Report shows $95 million spent on R&D, with 67% dedicated to Winter Sports and 12% dedicated to Ball Sports. That’s approximately $11.4 million for all of Wilson: tennis, racquetball, Squash, baseball, football, basketball, volleyball, soccer, badminton, something called “pickleball” and, of course, golf.

“Golf is basically getting over a third of that,” says Clarke. “The thing about that number that’s interesting is look at the number of bodies required to innovate basketballs. It’s not golf, you know? We get a bigger chunk of that money than we should if you were gonna divide it based on revenue.

“I can’t divulge our exact R&D budget,” says Vrksa, “but we do have enough money to do everything we need. We’re trying to hire an advanced innovation engineer, so we’re continuing to grow innovation…I’m not told ‘no’ very often.

“Bottom line is we have enough money…and Amer and Wilson Corporate and Wilson Golf specifically are dedicated to innovation and know we need more. As we grow the business, that will be given.”

Vrska recently presented to Amer’s chairman of the board on a new prototype iron he’s working on.

“We spent a good amount of time on the prototype, why it’s important and why we’re spending money doing some things we haven’t done recently. The hope is for that iron to come out to consumers in 2016.”

Realistically, Wilson Golf’s R&D budget may be in the $4 million range, but there is synergy with other Wilson divisions (Fat Shaft evolved from tennis racquet innovation). Callaway’s 2013 R&D budget, on the other hand, was more than $31 million. Can Wilson really expect to compete in the same ball game?

“We’re focused on what we’re doing,” says Vrksa. “We’re an iron company, but we’re an iron company that sells an awful lot of golf balls, and we’re an iron company that’s starting to sell more drivers. But we’re an iron company first and foremost.

“We’re dedicated to making great low-compression golf balls, to making great irons for every player out there and we’re now making inroads in the driver market. Our innovation time, budget and resources are going to be dedicated to that low compression ball, irons and drivers specifically.”

Low Compression Balls – The Next Big Trend?

“What’s funny about low compression is we’ve been low compression leaders since Staff Titanium,” says Clarke. “When golf balls were 110 compression, Staff Titanium was like 80, so we’ve been at the forefront of this since 1997. When you look at what the Duo has done out there…we went from non-existent in the premium ball category to a share, to a point where Callaway launched Super Soft – and that’s basically a Duo knock-off.”

“Bridgestone has the same idea. Srixon’s getting softer and the new ProV1’s are getting softer. They don’t talk about it because they’re supposed to be the world-class guys, but make no mistake – if you look at ProV1’s last three changes, what have they changed? They’ve changed the compression, which means compression does matter.”

Wilson Golf is off life-support and finally turning a small profit. But has this narrative put us any closer to really knowing who Wilson Golf is or what the brand stands for?

In our final segment we’ll take a closer look at how Wilson views its Tour players, its equipment philosophy as we enter 2015 and how it handles equipment missteps. And by the end we may have a clearer idea of who Wilson Staff is and where its future may lie.

In Case You Missed It

Part I – How The Wilson Staff Empire Crumbled
Part III – So What Now, Wilson?