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South Dakota Golf Company Tees Off on Sports Boom

July 4, 1989

SIOUX FALLS, S.D. (AP) _ As golfing booms across the country like a 275-yard drive zipping down a fairway, Dave Austad knows there’s a lot of golf clubs to be sold.

And while he’s trying to hawk mashies, woods and wedges to an estimated 23 million U.S. golfers, he figures they’ll also need golf bags, golf balls, at least one glove apiece, shoes, loud clothes and maybe some fuzzy head covers.

Austad is president of Sioux Falls-based Austad Co., a mail-order golf equipment supplier that’s one of the biggest in the world. His father, Oscar Austad, started the business out of the back of his car in 1963 when he sold polyurethane tubes to protect golf club shafts.

The company has since grown into a $50 million-a-year business.

Golf merchandising is a nearly $8 billion-a-year industry, according to the National Golf Foundation. Austad Co. says it has about 2 percent of the $2 billion catalog business in equipment for the links.

The company boasts a mailing list of over 2 million names, and about 26 million catalogs are sent out every year. An average of 61,000 orders a month are taken with $60 as the average price per order, Austad said.

So with those kind of numbers and all that golf equipment around, you’d expect Oscar and Dave can play some stick. But Oscar hasn’t played in 12 years, and Dave’s golfing ability is just average.

″The story goes, dad would go to a tournament, and when he’d step up to the tee, everybody would figure this guy is going to kill the ball,″ said Austad.

″He was absolutely so terrible he’d drop three in the water and everybody would walk away thinking that if he can’t hit his own product, they sure aren’t going to buy it.

″He decided for the betterment of the company, he should quit playing.″

The firm has begun to make a big push in foreign markets, with the Japanese the big prize of the golf marketing world. In Japan, golf, like baseball, is fanaticized.

″Golf is exploding everywhere,″ Austad said. ″In Japan it is more than in the U.S. But they’re not as accepting of direct mail.″

Last year, Austad Co. signed an agreement with Mazda Corp. to sell the automaker clubs and other equipment wholesale that are sold, in turn, to its workers at discount prices.

Recently, Austad placed ads in two of Japan’s biggest golf magazines for subscriptions to its catalogs, which have been translated into Japanese.

″We’re really just putting our toes in the water right now,″ he said. ″What we’ve found surprising is a lot of companies don’t want to go into Japan; they see it as a hassle.″

The company also is making a move in the retail market. In addition to its flagship store in Sioux Falls, which sports an indoor sand trap and a golf video range, a second shop is opening in Minneapolis.

″We see retail growing rapidly,″ said Wayne Steinhauer, Austad’s vice president of customer relations. Many of the company’s customers are in the Minneapolis area, he said.

That raises the question of location. As one of the sport’s biggest suppliers, some might think the Austad Co. should be near Pebble Beach, Calif., or Augusta, Ga., both home to golf championships. But South Dakota?

″It hasn’t hurt,″ Austad said. ″In the States people think ‘South Dakota, these guys have to be honest.’ Some people get a little uncomfortable giving their credit card number over the phone to somebody in New Jersey.″

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