Tennis Industry magazine


The Future is Now

Recent economic news is leading industry-watchers to see positive signs for the new year.

By Mitch Rustad

The flurry of good economic news in late 2003 has finally allowed the country to bask in some optimism — albeit cautiously — as we start the New Year. But will the steady stream of good tidings (highlighted by last year’s explosive third-quarter economic growth of 7.2 percent, the strongest in nearly two decades, and a Dow Jones average that topped 10,000) translate into a prosperous 2004 for tennis retailers?

First, let’s consider the short-term prospects of the U.S. economy via one of the nation’s top financial watchdogs — Gary Wright, CEO of G.A. Wright Marketing Inc., a direct marketing and fulfillment company in Denver. If the recent mood of his clients is any indication, Wright says the economic slowdown that began in 2001 could indeed be almost over.

“I see more optimism in general,” says Wright, “and no recession lasts forever, so we’re overdue for a recovery.”

Wright says the encouraging headlines of the past few months — consumer confidence growing, unemployment inching downward — have reinforced his positive outlook. “I see a fairly prolonged period of economic expansion ahead,” says Wright. “I’m optimistic about it, though it’s not roaring back for anyone yet, my perception is it’s definitely moving in the right direction.” With election-year politics likely to ensure a “play it safe” White House strategy throughout 2004, Wright expects steady interest rates and inflation that remains under control to continue — at least for now.

That optimism is generally echoed by many in the tennis industry. HEAD Penn Racquet Sports’ Kevin Kempin says one of the strongest indicators of an industry turnaround is reflected in his company’s tennis ball sales.

“The trend in tennis ball sales is flat, which is actually good news, because it’s stopping the downward trend of the last few years,” says Kempin. “I think this indicates that we’ve hit bottom and things have stabilized.”

Kempin says another positive sign of a recovering industry is reflected in the overall pro specialty sales, which he notes were finally up in October — a first for 2003. “It turned a corner then, I think,” he says. “The overall economic news is definitely a plus, and people may decide to splurge now.”

One company that hasn’t even felt the lame economy’s sting in the last few years is Marcia Apparel. The Chatsworth, California-based company enjoyed high double-digit sales increases in the past two years, which the company expects to continue in 2004. “We’ve gotten so much team business, which to me says the ladies are back playing,” says Patrice Brayer, Marcia’s national sales director. “Now we’re starting to see people settling in the game.”

Other, less scientific signs also seem to indicate the more optimistic mood in the industry. “I’ve been getting a lot of e-mail lately from people opening tennis shops, so I think there’s a general perception out there that says the industry is going to be healthy,” says Brayer.

Jim Baugh, president of the Tennis Industry Association, says the health of the overall economy and emerging racquet technology that will excite the marketplace are key factors to the industry’s fortunes in 2004.

“I think the improved consumer optimism is a great thing, because it’s been a little bit of a drag on our sport,” says Baugh. “But there’s a lot of performance value product out there making it harder for consumers to gauge the new technology. Two-year-old racquets are selling for half price, and the consumer doesn’t really know the difference. That’s an interesting challenge.”

Given such concerns, the general industry mood seems upbeat. Increasing signs of an industry willing to work together — the TIA’s Tennis Welcome Centers being the latest example — to grow the game is another bright spot looking into 2004. But still-anxious retailers may be wise to focus on the positives, says Wright.

“I would say to be cautiously optimistic, and not be overly pessimistic,” says Wright. “This is going to be a good year, and [retailers] need to be ready to take advantage of the consumer that is loosening up and showing a willingness to spend.”

U.S. Weekly Leading Index (growth rate)
January 2002-December 2003 (monthly averages shown)
U.S. Weekly Leading Index

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About the Author

Mitch Rustad has been a long-time freelance writer based in New York City.



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