A new executive management team, led by Jonathan Fellows and backed by LDC and Royal Bank of Scotland (RBS), has acquired a majority interest in American Golf Discount Centre Limited (American Golf), with the intention of accelerating its new store opening programme.
American Golf is Europe’s leading specialist retailer of golf equipment and accessories. It is the premier golf specialist with nationwide UK representation, currently trading from 61 outlets ranging from Inverness to Plymouth and serving over 1 million customers a year.
Its trading strategy is to offer the most comprehensive range of golf equipment in the market at highly competitive prices. It stocks over 30 major golf brands including Callaway, TaylorMade, Titleist, Ping, Wilson, Mizuno, Powakaddy, Maxfli, Nike and adidas. The stores are managed by committed and enthusiastic low handicap golfers and offer specialist advice, customised club fitting, lessons and other value-added services.
The business commenced trading from golf course pro shops in the late 1970s and opened its first retail store in Warrington in 1981. Outside its heartland in the north west, it has become well established in Yorkshire, the Midlands, in Scotland and in Wales, with a growing presence in the south and south east of England, helped by recent openings in Camberley, Slough and Chigwell. The American Golf head office and distribution centre at Warrington employs a total of 85 people, out of a current total of over 400 throughout the UK.
American Golf had 59 stores trading at the end of January 2004 and has so far added a further 2 new stores plus relocated 1 existing store in the current year, bringing its total retail sales area to more than 135,000 sq. ft. It has identified a further 40 locations suitable for new store openings and plans to open at least 25 additional outlets over the next 5 years.
American Golf has won the “Best Golf Retailer” Award voted for by the readers of Today’s Golfer, the UK’s biggest selling golf magazine, for five years in a row from 2000 to 2004.
In the financial year ended 26 January 2004, annual sales were up 21% to £63.7 million, which resulted in operating profits of £6.7 million.
The owners, Howard Bilton and Tony Norton, have agreed to sell a majority interest in the business to a new executive team, led by Jonathan Fellows and backed by LDC, who intend to grow the business over the next five years by opening at least 25 further new stores, by relocating some existing outlets, developing the retail store format, and enhancing the product offer, promotion and merchandising.
LDC, a wholly owned subsidiary of Lloyds TSB plc, has developed a relationship with American Golf over a number of years and has worked with its management to identify suitable opportunities for accelerating the growth of the business.
Jonathan Fellows joined American Golf as finance director 12 months ago with solid High Street experience gained at established retailing businesses including Lloyds Chemists and Thorntons Chocolate. His brief was to help Howard Bilton and Tony Norton realise some value from the business that they had built up over more than twenty years and this week’s deal is reported to be worth around £40 million.
Fellows now becomes chief executive; he has already brought in Ian Williams as commercial director and Ged Gould as the new finance director. The appointment of a business development director is expected soon.
Following completion of the transaction, Tim Brookes, current chairman and former CEO of Jessops, the UK’s leading specialist photography chain, will become chairman of American Golf and Martin Draper, director of LDC, will also join the new board. Howard Bilton and Tony Norton will step down from the board but will continue a close involvement as consultants to the business.
“American Golf is already the UK’s leading golf specialist, reflecting a unique combination of expert professional advice and services, the most comprehensive range of golf equipment and accessories and an exceptional value proposition, ” said Jonathan Fellows and continued, “I am extremely excited about the opportunity ahead and delighted to join LDC, RBS and the new team in providing American Golf with the resources to accelerate its successful expansion. We have opened 6 new stores in the past twelve months, and intend to add a further 6 more by the end of 2005, creating additional jobs and providing significant career development opportunities for our current 400 employees.”
Martin Draper, director at LDC said, “American Golf is exactly the kind of business we like to invest in – well-established in its field, capable of significant growth by organic expansion and led by a committed and professional management team. With a trading format which clearly appeals to its customers, and with our provision of additional financial resources, we can work together to achieve a significant acceleration of American Golf’s development.”
On behalf of the sellers Tony Norton said, “We have been considering our options for some time, seeking to realise some of the shareholder value we have built up in the business and to reduce our day to day involvement without relinquishing our interest totally. We are pleased to have reached this agreement with LDC and the new management team and we look forward to seeing the business growth accelerate based on the sound foundations and the service, range and value proposition that we have successfully established.”
American Golf Discount www.americangolf.co.uk