New deal afoot for Softspikes, MacNeill Shoes: Marriage of two companies will give one improved manufacturing and the other better marketing of nonmetal cleats.; Sporting goods
By Eleanor Yang
Baltimore Sun Published: Sep 03, 1997 at 12:00 am
Chalk up another birdie of a deal for Rockville-based Softspikes Inc., the pioneer maker of replaceable nonmetal golf cleats. Last month, the company signed a joint operating agreement with MacNeill Engineering Worldwide, a Marlborough, Mass.-based manufacturer of cleats for soccer, football, baseball and golf shoes.
Starting Oct. 1, MacNeill will take over Softspikes’ manufacturing, and Softspikes will take charge of MacNeill’s marketing and sales.
After nearly a year of negotiating, the two privately held companies signed a 10-year deal in which they won’t exchange any money.
“It all works out, in terms of the economics,” said Jon Hyman, Softspikes’ chief executive officer. “The more product I sell, the more he produces, the more money he makes. He has a vested interest in my success.”3
It’s the most recent business move for the 4-year-old Softspikes, which produces the polyurethane cleats that resemble mushrooms — one-half-inch high with three-quarter-inch diameter domes, each topped with eight to 12 nobs.
Since the product was invented in fall 1991, Softspikes owners Bill Ward and Myron Gerber boast, more than 2,200 golf courses — nearly 15 percent of the 15,000 courses nationwide — have banned metal spikes from their courses.
Much of that is because the plastic cleats translate into lower maintenance costs for golf courses, as well as comfort and smoother putting greens. The U.S. Golf Association estimated in 1994 that metal spikes caused $40 million in damages to golf courses around the country. And golfers attest to the advantages of having lighter shoes and fewer holes and dirt clumps on putting greens.
“I have been pleased,” said Curtis Mabry, golf professional at Green Spring Valley Hunt Club in Owings Mills, who has been wearing Softspikes cleats for a year. “I’ve never slipped, and the shoes are lighter and more comfortable.”
Ward and Gerber persuaded golf professionals like Mabry to try out their product by providing sales incentives, such as offering them complimentary cleats.
“We would tell different clubs that we’d provide them with free spikes if they could show us the letter they sent to members telling them they were banning metal spikes,” said Gerber, 70, of Bethesda.
Doug Petersan, head professional at Baltimore Country Club, said he recalls Softspikes salesmen calling him for three years, providing him with lists of other clubs that had offered Softspikes and banned metal spikes from their courses.
Having built its credibility by persuading superintendents and golf professionals to try the plastic cleats, the 47-employee company now is focusing more on public golf courses, which make up the largest portion of the nation’s courses. Kelly Elbin, vice president of marketing, said the company also is pursuing ++ resort courses and celebrity golfer endorsements.
These strategies have helped the company attain what Hyman said is between 70 and 80 percent of the market share. But being the pioneer has brought challenges.
Hyman said he has to make a special point to call his product “alternative golf cleats,” instead of “soft spikes,” to avoid confusion between the company name and the generic name of the product.
“When you say ‘spikes,’ people actually think metal,” Hyman said. “So we need to tell people it’s not a spike.”
Hyman said the company has also had its share of patent issues. Although it has 10 patents and 19 more pending, the company still has to fend off copycats.
He said the company is suing two sports apparel makers — Etonic Inc., a subsidiary of Swedish company Proventus AB, and Trisport Ltd., of England. Hyman said Softspikes settled recently HTC with another manufacturer, Bite LLC, of Redmond, Wash., over image and function issues.
Still, those are small handicaps to overcome for a company that this year plans to triple last year’s gross revenue.
And the joint forces of Soft-spikes’ three subcontracted plants in Idaho, along with MacNeill’s two plants in Massachusetts and New Hampshire, will mean the capability to swing out 3.5 million plastic cleats each day.
That’s a far cry from Ernie Deacon’s idea in 1991 to develop some kind of winter cleats that wouldn’t damage the frozen roots of the turf at the Boise, Idaho, course he manages, Warm Springs Golf Course. Deacon asked Boise inventor Faris McMullin to work on the idea.
“We had to provide a traction surface that was nonpenetrating, so I knew it had to be short,” McMullin said. “But in order for it to provide enough traction, it had to have multiple protractions.”
Two weeks later, McMullin — who is now Softspikes’ senior vice president and technical director — gave Deacon a prototype of the original swirled cleat. Initially, the two men thought the cleats would be used only on Deacon’s course. McMullin, who projected total production at only a few million cleats, was hesitant to take on the project, but figured it was a business arrangement.
The production really took off after Bill Ward got a set of the cleats during a promotion at a golf course.
“I put them on my shoes and said, ‘This is the spike of the future,’ ” the 70-year-old Jackson Hole, Wyo., resident said. Eventually, Ward and Gerber bought the company from Deacon and moved the headquarters to Rockville.
Over the last four years, McMullin has experimented with and developed the other three models, the last of which will debut Monday at the PGA International Golf Show in Las Vegas.
And the alternative cleat market has grown dramatically.
Hyman predicts that he has about nine or 10 competitors, but he doubts there will be more than a few within a year.
“They can’t make any money,” he said. “You have to make 75 million (plastic cleats) to make any money, and it’s pretty tough.”
In any case, he said, he doesn’t think metal spike manufacturers will last even that long.
“The growth has been tremendous. Metal spike companies will end up shipping plastic cleats,” Hyman said. “Metal will die here in the U.S. within a year.”
Pub Date: 9/03/97