Direct Golf holes £3.5m funding package

The Huddersfield-based specialist retailer, founded and owned by former PGA professional John Andrew, will use the finance to increase its store portfolio and build its online business.

Direct Golf is also looking at developing a state-of-the-art concept store in the North of England.

The company arranged the new facility after switching to Royal Bank of Scotland after banking with Barclays for 22 years.

Neil Bell, managing director, said the deal gives the company some “breathing space” after a “car crash” of a summer in 2012 when wet weather, the Diamond Jubilee, European football championship and London Olympics “sent the industry on a downward spiral”.

He added that Mr Andrew, the chairman, had personally funded the company’s expansion from 12 to 21 stores.

The company turned over £32m in 2012 and has made a profit every year since it was founded in 1991, said Mr Bell, a former club pro who joined in 2000. He expects that 2013 will be a year of consolidation after the recent growth of the store estate.

Mr Bell said Direct Golf will also develop its website to offer new services, including click and collect.

He revealed plans to open a concept store in the North, which will take inspiration from developments in the US golf retail sector.

“It will be something that nobody in the UK has done before,” said Mr Bell.

The next step will be the move towards 30 stores in the UK, added the managing director, who hopes to have each Direct Golf store located within an hour of one other.

He is also looking at expansion into Ireland and Wales to meet customer demand, identified from the company’s database of customers.

The database has 800,000 golfers and is used to pinpoint areas for new stores.

Mr Bell said: “We know if we open a store it will work.”

Direct Golf stores typically range from 3,500 sq ft to 6,000 sq ft.

They tend to be in high street locations or next to busy driving ranges.

The company employs more than 300 people, including 50 PGA professionals, and has a 75,000 sq ft warehouse. Its main rival is American Golf.

Mr Andrew said: “Our aggressive retail openings in the last few years were funded purely from our own cash flow.

“A poor summer in 2012 increased this pressure on our cash flow, which meant I had to personally inject more than £500,000 into the business – although I am sure many SMEs did the same.

“As a result, we sought funding to allow us some room to breathe and this funding package with RBS allows us to focus on the future of our business, to pay our suppliers and take our settlement discounts, which add up to a considerable amount over a period of 12 months.”

Craig Bebbington, a relationship director at RBS, said: “Direct Golf has a 22-year history and is now one of the largest specialist golf retailers in UK and Europe, with a presence that continues to grow across the country.

“The firm is led by a dedicated and golf enthusiastic management team, including many PGA professionals, with a thorough understanding of the market.

“We are delighted to be able to support the expansion of this sector-leading UK company and our team will work hard to help.”