VOLUME 12, NUMBER 7
Web Street Golf Report
VOLUME 12, NUMBER 7
Monday, February 16, 2009
WHAT’S IN STORE??? Longitudes Group has completed a new report for 2009 documenting the market profiles of the 22 largest off-course golf retail brands. The report measures a number of variables for those golf retail brands with five or more stores conducting business in the US market. The report compares and contrasts the brands, and relates how each retail chain impacts the local markets in which they compete. Sara Killeen, President of Longitudes Group, forecasts in 2009, “We’ll see continued contraction and consolidation this year as the larger retail brands close under-performing stores, tightly manage inventories, conserve cash and re-focus on their best customers.”
Among some of the published findings in the research is that size matters. Longitudes said there are 22 retail chain store brands collectively that control 644 store locations or 44% of all the doors in the US marketplace. The balance, 808 retailers, represents those with fewer than four locations. The sample of chains studied represent 65% of all off-course square feet while serving 57% of the US golf population. New York Golf Center, due to its location with stores in densely populated Manhattan and the New York area, represents the highest number of golfers per store at 84,000 golfers; nearly double the next major competitor, according to the research findings.
“2009 will continue to be extremely challenging for both small and large retailers alike. Since 2004, there has been a 15% expansion in the total square feet in the off-course golf market,” Killeen remarked. “Brands that extended their reach into certain retail trade areas, are now realizing that wasn’t a good idea.”
The retail brands included in the report are:
Austad's Golf Stores
Bobby Jones Golf
Boyne Country Sports
Las Vegas Golf & Tennis
New York Golf Center
PGA Tour Shop
PGA Tour Superstore
Pro Golf Discount
Special Tee Golf
Tee To Green
The Golf Mart
Van's Golf Shops
In the overall off-course retail segment, the last eight years large format retailers have aggressively employed an open door policy by expanding stores across the country, putting many smaller stores out of business. These ‘Big Box’ stores have slowed or even stopped their growth this last year due to the economy. According to the Longitudes Group, the Big Box brands still represent 21% of all stores, and 59% of all retail space in the channel. Since 2005, the off-course market has experienced a net loss of 332 doors, it reported. The report is affordably priced at $275 per copy through Longitudes Group website, www.longitudesgroup.com/reports.
PRICE CHECK! Nike Golf has adjusted the pricing of its recently introduced STR8 FIT adjustable driver. Even though it has yet to be delivered to retailer accounts, the new minimum advertised price has been lowered to $399.99. The original manufacturer’s suggested retail price was $540.00 when Nike announced the STR8 FIT late last year.
According to the company, the basis for the change is a reflection of recognizing the pressures of the driver market as well as today’s economy. The company has moved up its official market delivery date for accounts that committed in the early fall run, to March 20. Accounts that elected a later delivery date of the product will not be required to change.
HIT ME ONE MORE TIME: Its only February and outside of the sun belt in the United States, its still unknown when recreational golf will come on line this year. The economy continues to be the story and many stakeholders within the golf industry are more than a little curious how courses and retail shops will be supported once old man winter departs. It’s unknown how the latest stimulus intervention will alter the present course or when it might begin to be felt, adding to the intrigue of what may be around the corner.
It appears Callaway Golf has generated a bail out plan of its own as the retail price on its FT-i and FT-5 drivers have been cut down to $199. The company’s Hyper X, introduced last year is also residing at $199. However, it is interesting to note Callaway’s FT-i Squareway fairway wood is maintaining its price of $299.
JUST DO IT! Nike, Inc. is restructuring its business. The company said it intends to realign its businesses throughout the organization and may result in an overall reduction of up to four percent of the company’s workforce. The Beaverton, OR., behemoth employs nearly 35,000 people worldwide.
“The power of the Nike brand and the diversity of the Nike portfolio continue to be a competitive strength,” stated Mark Parker, President and CEO of NIKE, Inc. “In light of the current economic climate, it is more essential than ever to sharpen our focus on the consumer to maximize opportunities for product innovation and brand management in the marketplace. The decision to reduce our workforce is a difficult one, but it will put our business in the strongest position possible to continue to deliver long-term profitability and growth.”
As part of this effort, the company will review its entire supply chain from the sourcing base to the retail footprint to ensure it is in the best position to bring elevated consumer experiences to market. It anticipates completing the review of its organization by the end of the current fiscal year. The exact number, timing and location of positions expected to be eliminated will not be known until the review is completed and employee representative bodies have been consulted within accordance with local legal requirements. No word on how or to what extent this will be felt within Nike Golf.
K.I.S.S.: In these demanding economic times, golf in general may find itself put to the ultimate test. The peak of the pyramid, the PGA Tour, is insulated in 2009, but everything else looks to be fair game. Golf has often been associated with an affluent consumer. The hard costs associated with playing are expensive even during times when money was easier to come by. The days of spending $500 for a new wonder club or several hundred to play a once in a lifetime venue isn’t quite as vibrant on a mass application as days gone by. At present, it seems everything in life is being second-guessed on cost and the chances of finding an affordable alternative often seems remote.
However, one company has found it doesn’t need to charge an outrageous premium for its products simply due to its involvement in golf. For many years and product cycles, golfers have eagerly accepted a potential plug and play application as an absolute means towards improve. Shelling out a lot of money on equipment or training aids has been the standard operating procedure many consumers and companies have subscribed to. In the end, the fix is often temporary and leads to the exercise becoming repetitive as well as redundant. One theme that has become popular with equipment companies and golf consumers is visible technology. In other words: Seeing is believing.
NURU, based in Salt Lake City, UT., has a company stated mission to provide portable, performance-enhancing knowledge to the masses. It takes information and makes it more understandable and actionable, using language and illustrations (i.e. visual technology) that everyone can understand. Then, it puts that knowledge on simple, portable media that can be taken and used anywhere. We’ve all heard the notion that practice makes perfect. Often times in golf, practice at the recreational level is an exercise in polishing bad habits. NURU has created a variety of products to help players from lag putting to chipping with a specific target in mind or alignment from tee shots to iron play. The company’s VIZ Kit contains training aids that can immediately influence a player’s practice habits in all aspects of their game regardless of whether someone is a high handicapper or an accomplished player. “Our goal in creating and packaging the NURU Viz Kit was to stay simple and effective,” explained Scott Warner, the company’s lead inventor and CEO. Warner isn’t new to golf. He formerly developed a variety of innovative golf products for Ogio International. “Each tool focuses on the fundamentals that every renowned golf coach emphasizes. And with a retail price of just $39.99, we’ve removed any barriers to entry for the average golfer.”
NURU Golf was just named Preferred Supplier of Training Aids to The First Tee and recently attended the PGA Merchandise Show in Orlando where its believed the company sold 350-400 Nuru Viz Kit samples and took orders for more than 100,000 units. "We saw a real need for a portable low-cost, simple package of training aids, and the response at the Show has been overwhelmingly positive. PGA Professionals have purchased a kit for their entire membership and golf academy directors want one for every student. Everyone who stopped by the booth was blown away by the Nuru training aids."
The NURU Viz Kit features five training tools that target every aspect of a golfer’s game from chipping and putting, to balance, power and accuracy. The company also has created 30 compact cards. Each one contain a practice drill to improve balance, power, accuracy, swing mechanics, chipping, putting, and more for individuals who are looking for assistance with ways to leverage their practice time. The company products are available at www.nuruplanet.com. All items include free shipping. For anyone interested in buying large quantities (tournament giveaways, junior clinics, etc.), contact the company directly at 866-665-NURU (6878).
DOUBLE DIGIT DROP: Ingersoll-Rand Company Limited (IR: NYSE), a leading diversified industrial firm, reported its fourth quarter operating results last week. Among its holdings is Club Car, which said its revenues declined by 22% compared with strong results in the fourth quarter of 2007 due to sluggish golf and consumer markets in the United States. The company did not provide specific revenues for its Club Car business, which is included in its reporting under the Industrial Technologies segment.
THE BUCK STOPS HERE: In a recent Securities and Exchange Commission filing, Callaway Golf (ELY: NYSE) revealed it has suspended matching contributions for all of its employees with respect to its 401(k) retirement investment plan for 2009. “We're taking a very, very hard look at our cost structure, not just from a product point of view, but also various support levels and, generally speaking, have taken a very conservative view on spending categories that we believe are more flexible,” said George Fellows, President and CEO. “But things such as Travel and T&E and a lot of the administrative expenses that we think we have some flex in, we've taken pretty hard cuts at. We have frozen salaries for next year. We have suspended 401(k) matching programs. We've essentially, although not completely frozen hiring, to the extent that we don't have critical positions that we need to fill.
“There are many, many areas on a worldwide basis that we took a very hard look at and we believe the net combination of those things will allow us to function quite comfortably through the year and still allow us to support the businesses as we feel they need to be. And so, we're not giving you any specific numbers because we can't at this point. We think we've clawed back a reasonable amount to try to offset some of the FX (foreign exchange) issues.”
FOOLS GOLD? The Arizona Republic reported the Apache Gold Casino Resort east of Globe, AZ., has temporarily closed its golf, discontinued keno games and laid off 9 percent of its workforce in response to the worsening economy.
Once thought to be recession-proof, Arizona's 23 Indian casinos saw a combined revenue drop of 16 percent in the fourth quarter of 2008, the paper reported. The first quarter of 2009 thus far, has shown no improvement. The moves were expressed as prudent business decision intended to contain costs and maximize revenue.
General Manager Scott Wilson told the Republic, the resort's Stronghold Golf Club, Entertainment Pavilion and keno operation did not have the draw needed to justify their continued operation. There are hopes to reopen the golf course in 30 to 60 days, but no plans to reinstate Keno games. "Keno is a dying game," Apache Gold spokesman David Peters told the paper. "It has been on the way out for some time."
SHORT SHOTS: Callaway Golf has introduced a new set of X-Forged Wedges. Built with forged 1020 carbon steel and its trademark “Mack Daddy Grooves” along with its C-Grind, a popular grind on tour, relieves the heel, toe and trailing edge, the wedges are available in twelve loft/bounce angle combinations. “Nothing provides more confidence than the beautiful lines and soft feel of forged carbon steel we offer in these X-Forged Wedges,” stated Roger Cleveland, Chief Designer, Research and Development, Callaway Golf.
The new product is available in two finishes: White Chrome or New Vintage and introduction retail price (vintage/chrome) of $119/$109.
PUTTING FOR DOUGH: Odyssey has introduced the Black Series i 2-Ball, extending its popular 2-Ball alignment series of putters. The latest from the company combines a precision milled head, according to Odyssey, for optimal balanced weighting with a rich, nickel-plated finish that reduces glare. It is built with a 1025 carbon steel body and a weighted tungsten flange to influence a low center of gravity. Tour insert, the company said features a highly resilient elastomer core to promote an enhanced feel.
“For golfers demanding the best in performance, precision and craftsmanship, Black Series i Putters are designed with multi-material construction, featuring a multi-layer Tour insert that provides premium feel and responsiveness,” said Austie Rollinson, Principal Designer at Odyssey. The Black Series i 2-Ball will retail for $299
Continuing on its 2-ball theme is the White Hot XG 2-Ball F7. According to the company, the weighted F7 wings on it raises the moment of inertia or resistance to twisting by more than 40% than the original 2-Ball putter introduced in 2001. The F7 uses a multi-layer insert and carries a retail price of $169.
Staying on the winged them for a minute, the White Hot XG Teron, named after the Greek word for “wing,” offers a Modified Hi-Def Alignment System, odyssey said, that features two alignment stripes running on both the top-center and outer wings of the putter head. The high-density alignment wings create incredible stability, Odyssey promised. “Inspired by high-performance, multi-layer golf ball technology, the White Hot XG insert takes two materials with different properties and combines them to take the level of feedback and feel to an all-new high,” remarked Rollinson. The White Hot XG Teron is priced at $169.
SHOP TIL YOU DROP ... PLEASE: Shopatron, a provider of eCommerce opportunities has added Nickent Golf to its vendor list. Authorized Nickent Golf retailers can enroll in the program at no cost and view and fill orders placed through the Nickent Golf Web site. Whenever someone places an order for either in-store pickup or home delivery, it is awarded to the closest stocking Nickent retailer participating with Shopatron.
"With this solution, consumers can research and purchase Nickent Golf products online in a branded environment while we build business for our retailers." said Dave Burningham, Senior Director of Sales for Nickent Golf. "At the same time, we build brand equity for Nickent Golf, by using the Shopatron System." Nickent Golf is rolling out the Shopatron system to all of its retailers this month.
FORE MORE YEARS: The Travelers Companies has extended its relationship with golf. The property casualty insurer has agreed to sponsor the Travelers Championship by four years, through 2014. Its original four-year agreement was through 2010.
“Our sponsorship of the Travelers Championship has been a great investment for our business and the community, and we’re excited to extend our partnership with the PGA Tour through 2014,” said Jay Fishman, Chairman and CEO of Travelers. “The Travelers Championship provides a tremendous opportunity to support the community and continue raising significant funds for local charities. It’s been an important part of the sports history in Connecticut and we’re committed as ever to help make it a first-rate event for players, sponsors and the fans.” Financial details of the agreement were not revealed.
IT’S IN THE BAG: Fred Couples has signed on with the bag manufacturer, Ogio to endorse its line of golf travel gear. In addition, the 1992 Masters Champion and captain of the 2009 President's Cup, will be working with the company’s designers to create a signature line of travel bags including golf travel covers, rolling luggage, messenger bags and backpacks.
“We’ve received some of the industry’s highest honors for creating exceptional golf travel equipment,” said Ogio’s Global VP of Golf Tom Gocke. “The one thing we still needed was that authentic icon who embodied the class, quality and personality of our gear, and we can think of no better fit than Fred Couples.”
A self-proclaimed Ogio fan, Couples has been using the company's travel bags during the 2008 PGA season. “I approached Ogio at first just to thank them for helping make my travels so smooth; when they came back with the idea of creating a signature line – and helped me see it for what it could be – I was in. I look forward to putting this gear to work all season long.”
The new signature collection for Couples will feature eight travel bags including special edition versions of the Mammoth, Monster, and Straight Jacket golf travel covers; the 9800, Terminal, and Layover rolling duffels; as well as the Epic backpack and the Street City Corp messenger bag. The company plans to begin shipping the new line in Fall 2009.
TALK IS CHEAP AND IN THIS CASE, THAT’S OK! Staying with the 2009 Presidents Cup Captain and former Masters Champion for another moment, Couples has agreed to endorse i2Telecom International, Inc. The company provides mobile applications and services. Couples will specifically represent the company's MyGlobalTalk mobile phone products and services, which it said allows users to save up to 94 percent on international phone calls.
The software download is free, unlike Couples and the service is strictly pay-as-you-go, requiring no connection fees, no contracts, no call minimums or data plans.
"I travel a lot. I've got friends and people I need to contact all over the globe, and honestly, I am not as good at staying in touch as I should be," said Couples in a company press release. "But, MyGlobalTalk is so easy to use and saves me so much, it's even got me using the phone now."
Paul Arena, Chief Executive Officer of i2Telecom International, Inc., stated, "Fred is widely respected within the professional golf community and among sports fans in general. We are confident that his association with i2Telecom will significantly broaden the awareness of MyGlobalTalk in the marketplace."
OUTSOURCING: Cleveland Golf/Srixon has formed a new advisory board whose principal role will be to offer guidance pertaining to all of the company’s brands. The company will turn to Paul Earnest- PGA Director of Golf at Four Seasons Resort and Club at Las Colinas, Scott Hamilton- Director of Golf at Cartersville C.C., Billy Harris- Director of Golf at Dallas C.C., Mike Leemhuis- National Director of the Club Managers Association of America and General Manager of Congressional C.C., Mike McGetrick- Founder of the Colorado Golf Club, Ken Morton Jr.- General Manager of the Haggin Oaks Golf Complex and President of the Association of Golf Merchandisers and Mike Small- Coach of the University of Illinois Men’s Golf Team for advice on a variety of topics.
“All of us at Cleveland Golf/Srixon are very proud to introduce our new advisory staff team members,” said Eddie Drye, Vice-President of National Sales for Cleveland Golf/Srixon. “We know that this distinguished group will play a significant role in our future success and we feel honored that they have chosen to be a part of our team.”
STOCK WATCH: Equity prices are hoping another dose of intervention will give it a much-needed shot in the arm. The news headlines were dominated last week over another rescue plan coming from Washington. On Friday, the White House said President Obama would outline steps to stem home foreclosures on Wednesday. Meanwhile, J.P. Morgan Chase & Co., Citigroup Inc. and Bank of America Corp. have committed to weeks-long moratoriums on foreclosures as the government works on a financial stability plan slated to include billions of dollars aimed at keeping people in their homes.
The House and Senate gave final congressional approval passing a $787 billion economic stimulus bill intended to jump-start a struggling economy. The stimulus plan, a mix of government spending and tax cuts, is expected to create or preserve 3.5 million jobs. Since December 2007, more than 3.6 million jobs have been lost domestically. Approximately a third of the package is devoted towards tax cuts for business and individuals, including a $400 payroll-tax holiday for workers, an expanded child tax credit and tax breaks for college expenses. New incentives are being provided for auto purchases and first-time homebuyers, among other things.
Despite the hope and promise to a better tomorrow, stock prices have been stuck in a reverse mode. The Dow Jones industrial average reverted back to its lowest close since last November, leaving it with a weekly decline of 5.2 percent. The S&P 500 and the Nasdaq followed suit posting weekly declines of 4.8 percent, and 3.6 percent respectively. Financial markets will have a shortened trading week in the US as they are closed on Monday for Presidents Day.
WHO WANTS MORE? How much golf can you play in a day? How about a full year? What if money wasn’t an obstacle to these questions? Pinehurst is challenging avid golfers for an answer - with an unprecedented grand prize to prove it.
From now through May 31, golfers from around the globe can enter the resort’s spring sweepstakes to win unlimited golf at Pinehurst for a year. Golfers can register now at Pinehurst.com/sweepstakes, for the prize that includes unlimited golf for the winner and a friend on any of Pinehurst’s eight golf courses – including the famed No. 2, site of the 2014 U.S. Open. Valid from June 1, 2009 to May 30, 2010, the prize also includes exclusive benefits when staying at Pinehurst, visiting the spa and enjoying its many amenities.
The sweepstakes celebrates the launch of Pinehurst’s spring Unlimited Golf Package, in which golfers are automatically upgraded to unlimited golf at normal one-round-per-day rates from March 8 through May 30. The $515 per person, per night starting rate includes unlimited greens fees (No. 2 at an additional charge), cart and practice facility usage, plus accommodations, the best breakfast in golf and a la carte dinner. The upgrade’s best value is in eliminating hundreds of dollars in replay fees.
“We’ve had a lot of fun in creating this sweepstakes, knowing golfers would love this challenge,” said Pinehurst Executive Vice President of Golf Operations, Don Sweeting. “Golf’s the great stress reliever, the best way to connect with friends, and a mind stimulator. Through both the new unlimited package and the prize, we want golfers to renew their love of the game.”
Full details on the grand prize, eligibility and full terms and conditions can be found on the sweepstakes page at pinehurst.com/sweepstakes. For more information or to make a reservation, visit www.pinehurst.com or call 800-487-4653.
THE INFORMATION CONTAINED IS BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED. THE OPINION EXPRESSED IS THAT OF TERRY MCANDREW AND SHOULD NOT BE CONSIDERED A SOLICITATION TO BUY OR SELL SECURITIES IN ANY OF THE COMPANIES DISCUSSED WITHIN THIS NEWSLETTER. CONTENTS OF THIS NEWSLETTER MAY NOT BE REPRINTED OR REBROADCAST WITHOUT THE EXPRESSED WRITTEN CONSENT OF TMAC GOLF
Last Updated (Wednesday, 03 February 2010 10:20)