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If Golf Is An Economic Indicator, We're On Our Way To Recovery

Thursday, 13 Jan 2011 | 4:27 PM ET
Karen D'Silva | The Image Bank | Getty Images

If you want to find out about the economic state of our nation, you can probably get a good indication by hanging out at a golf store.

When we were in the midst of the economic crisis, golf stores and manufacturers weren’t doing well.

The only reason people were buying new clubs was because retailers and manufacturers got together to offer insane trade-in and 2-for-1 deals.

So what does golf retail environment look like now?

For that answer, we went to Marty Hanaka, CEO of Golfsmith , which just reported its best fourth quarter in four years. Hanaka told me that the company’s Web business was up 40 percent and comp store sales were up 6.4 percent.

“The environment is better,” Hanaka said. “People are feeling better about their personal balance sheets and the equity markets and there’s pent up demand out there.”

Hanaka also said there’s great excitement around new products at high price points, including Titleist 910 D2 drivers, Callaway Octane drivers and the upcoming release of the TaylorMade R11 White driver.

Golfsmith: Back in the Swing
Golfsmith, the nation's largest golf retailer, reported its best fourth quarter in four years. CEO Marty Hanaka discusses the results with CNBC's Darren Rovell.

“Value is value for dollar spent,” Hanaka said. “It doesn’t mean low price and people are seeing value.”

One of the other ways Golfsmith is helping people realize value is by customizing their clubs with the help of a launch monitor. In 2010, Golfsmith’s custom fit club business was up 32 percent and Hanaka said there’s so much room to grow as the company found out that only 10 percent of golfers have custom fit clubs. Hanaka says it helps golfers play better and therefore means they’ll play more and get more for their money.

As for whether Tiger Woods’ lack of success in 2010 hurt the overall golf business, Hanaka said that it was overplayed.

“He hasn’t really affect business at all anything he gets is gravy,” Hanaka said.

It's not all positive for the golfing world. Through November 2010, rounds played were down 2.2 percent, according to PGA PerformanceTrak, which also reported a 3.3 percent drop in median gross golf fee revenues through November.

Questions? Comments? SportsBiz@cnbc.com

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