Cleveland Golf’s Got a New Owner

After a few months of speculation, word is spreading that outdoor apparel company Quiksilver is buying Rossignol, the parent company of Cleveland Golf and Never Compromise. Consolidation is nothing new to the golf business, but what can golfers expect to see out of these two brands once they’re under new ownership?

First things first: The deal isn’t final, and likely won’t be until the middle of the year. But assuming everything comes off as planned, I wouldn’t expect big changes at Cleveland and Never Compromise, at least not in the short term. If the deal does close mid-year, that doesn’t leave Quiksilver any time to make drastic changes to 2005 products, and much of 2006’s product lines will likely already be off the drawing board and into prototype or even final stages. So look for Cleveland and Never Compromise to stay on a steady course for the near future.

Realistically, I don’t think Quiksilver is going to make many changes at all with these two golf brands. Cleveland Golf in particular has had several good years in a row on the the strength of the Launcher driver line, the TA irons and, of course, its venerable wedge collection. Growth has been steady. Despite the growth, Cleveland is still well below the Big Three of Acushnet (Titleist/Cobra/Pinnacle/FootJoy), Callaway (including Ben Hogan, Odyssey, and Top-Flite) and TaylorMade-Adidas (with the Maxfli brand). Quiksilver’s stated goal is to be the No. 1 outdoor sports company. Will Quiksilver try to pump Cleveland/Never Compromise up to challenge the Big Three?

I don’t think so. The one synergy that will happen is that Quiksilver’s Fidra brand of golf clothing will benefit from overlap with the other two golf brands that will be in-house. Fidra, a cool apparel company helmed by Ashworth founder John Ashworth, will be able to use the Cleveland connection to start some new accounts, and probably gain some additional visibility on tour.

But the gap between Cleveland and the Big Three is still very large. Most prohibitive is that the fight for market share is fierce. There simply isn’t much chance of any company suddenly making a huge leap by gaining several percentage points of market share in a given category. TaylorMade has caught up to Callaway in woods, for example, but it has taken years of massive spending on tour and slash-and-burn discounting at retail to get there. Is that what Quiksilver is willing, or even able, to do with Cleveland? I don’t think so. Plus, Cleveland doesn’t have a ball line, which is key in the head-to-toe competitive world the Big Three play in.

If I were running Quiksilver, I’d be very happy to have Cleveland on board. A company that has both good sales and strong respect with average players and Tour players is a valuable commodity, and likely a very profitable one. Never Compromise has promise, and could perhaps rise a bit higher in the putter standings. Fidra will certainly enjoy a boost. But don’t look for any changes soon, and don’t look for dramatic changes at all. As noted non-golfer Martha Stewart would say, that’s a good thing.