VOLUME 12, NUMBER 12
Web Street Golf Report
VOLUME 12, NUMBER 12
Monday, March 23, 2009
NO ONE SAID IT WOULD BE EASY: Business conditions are rugged. The economy isn’t helping anyone’s cause and it remains to be seen when it will turn from foe to friend. Foreign exchange rates are another challenge for global businesses to make a buck. For one golf company that has both of those distractions to contend with, there is another one looming that has elevated itself up the priority chain.
True Temper Sports, Inc., a manufacturer of golf shafts and performance sports equipment, did not make the principal payment on March 16 that was due on its revolving credit loans. The amount is equal to $20.0 million. The company which markets golf shafts and other recreational sports products under the True Temper, Grafalloy, Royal Precision and Alpha Q brands is in default under the First Lien Agreement, which entitles the lenders to immediately accelerate the repayment of all other amounts borrowed under the agreement together with accrued and unpaid interest. As of March 16, 2009, the principal amount outstanding (including revolving credit loans) under the First Lien Agreement was $101.7 million. Its troubles don’t end here either.
The non-payment of principal under the First Lien Agreement, if continued for 90 days after notice or if the maturity of principal of the First Lien Agreement is accelerated, will constitute an Event of Default under the Second Lien Agreement, giving the lenders under the Second Lien Agreement the right to accelerate the repayment of amounts borrowed under the Second Lien Agreement together with accrued and unpaid interest. As of March 16, 2009, there was $45.0 million borrowed under the Second Lien Agreement.
Also on March 16, 2009, True Temper did not pay interest that was due to the holders of its 8 3/8% senior subordinated notes that is due to mature in 2011. If it fails to continue not to pay the interest due for another 30 days, it will constitute another Event of Default. This will give the holders of the Notes the right to accelerate the payment of the principal outstanding together with any and all accrued and unpaid interest. The principle amount outstanding as of March 16, 2009, was another $125.0 million.
Meanwhile, it should come as no surprise that True Temper has retained the services of investment banking firm Lazard Middle Market to explore alternatives for it to consider as it attempts to restructure its financial house. Scott Hennessy, President and CEO stated, "As we endeavor to restructure our overall debt profile, we maintain our commitment and focus on being a world leader in high performance sporting goods equipment. Delivering innovative products and services to our growing global customer base remains the focal point of our ongoing operational strategy. In launching this capital structure review, the Company is supported by a strong cash position on its balance sheet, and True Temper customers, suppliers and employees should not be directly impacted, and will ultimately benefit from a much stronger worldwide enterprise.”
The company which markets products under the Dynamic Golf, Rifle, Sensicore and Grafalloy brands to name a few, estimated that it possesses approximately 70% to 80% of market share of the worldwide steel golf shaft market in its 2007 annual report. In conjunction with the non-payment to its creditors, True Temper released preliminary sales results for 2008. Revenue, it said, will exceed $123 million, eclipsing the previous record of $117 million. It stated profitability for the 2008 calendar year improved significantly and finished in line with its expectations.
RESPECTABLE: Adams Golf (ADGF: NASDAQ) reported net sales in 2008 of $91.5 million. It was a slight drop off from the prior year when it recorded $94.6 million. However, the bottom line recorded a more significant change than seen on the top line. Adams Golf said it lost $1.5 million versus a net profit of $9.4 million in 2007. In 2007, the Company benefited from the recording of a deferred tax asset of $4.8 million.
``2008 was a year of mixed results for our company,'' said Mr. Chip Brewer, CEO and President of Adams Golf. ``In the face of difficult market conditions, our earnings and revenue performance lagged expectations but fortunately were enough to sustain our strong financial position. On the positive side, our company continues to both gain market share in its primary categories and increase its brand strength. According to Golf Datatech, during 2008, our full year U.S. woods dollar market share increased by 25% and our iron dollar share increased by 10%.
“We are pleased with our market share gains, improved brand strength and product positions; however, in the face of what are clearly difficult market conditions, we have also taken steps to reduce our overall expenses with a dual agenda of maintaining our brand and market share momentum while at the same time protecting our strong financial position. Accordingly, we have lowered our year-over-year fixed costs by approximately 13% and are prepared to go further if needed. At the same time we will remain a competitive marketer via multiple endemic media channels and have sustained our primary tour strategies. Our intent is to position ourselves to come out of what appears to be an extended down market with continued financial strength and at the same time increased market share and brand momentum. We are optimistic that this strategy will deliver long-term shareholder value when market conditions inevitably improve,’’ Brewer concluded.
The Company reported an aggregate cash and cash equivalents balance of $6.0 million as of December 31, 2008.
GIVING IT AWAY? If you’re looking for a pulse on the promotional activity already present on the equipment side of the industry consider Golfsmith’s (GOLF: NASDAQ) aggressive position with TaylorMade. It’s important to note up front that no purchase is necessary. Anyone who purchases one of TaylorMade’s three new drivers at any Golfsmith store or online at www.golfsmith.com - the R9, r7 Limited or Burner 09- by April 11th will have the purchase price fully refunded by Golfsmith if Sergio Garcia wins The Masters.
"We're excited to combine the No. 1 selling driver brand in golf, TaylorMade, with one of the very best golfers in the world, Sergio Garcia, into one event only at Golfsmith," said Martin Hanaka, president and CEO of Golfsmith. "TaylorMade's new R9 driver is the hottest driver in the marketplace, and this promotion will only add to that excitement as we kick off the season in Augusta."
Well there isn’t any bias in that statement. I wonder how it makes Callaway, Nike, Titleist, Ping or Cleveland, to name just a few brands, feel about their products in the driver category heading into the upcoming selling season when a major retailer’s CEO singles out a specific product?
"Sergio has a lot of fans in the United States. Imagine how many more he'll have if by winning a green jacket he wins a free TaylorMade driver for everyone who participates in this promotion," said Bob Maggiore, TaylorMade's vice president of marketing.
To learn more about Golfsmith's promotion with Sergio Garcia and TaylorMade-adidas Golf, stop by any Golfsmith store or visit www.golfsmith.com/gosergio and remember, no purchase is necessary.
WAIT UNTIL NEXT YEAR! Behind the scenes on the PGA Tour, players are already thinking about 2010. While the first major has yet to be contested, it might catch some people off guard that some energy is being devoted towards next year while there are still plenty of holes to be played in this year. “ I think the Tour is trying to be a little bit proactive, and I think it's a good idea,” said Jim Furyk, “in kind of getting players involved saying, hey, don't wait till the end of year. This is something you want to get a hold of early on.”
The first round leader of last week’s Transition Championship was talking about the upcoming change in grooves. “I've been talking to Srixon (his equipment company) since the middle of last year just for ideas. I've already got sand wedges that I've hit and tested a little bit, the week before I left for Doral with conforming grooves for next year. And as the year goes on, we'll test more of those wedges,” he said.
Furyk has also been experimenting with other clubs in the bag too. “I just switched back to an old set of irons,” he said. “So the irons I've been playing the last year were conforming (2010 new standard) and the ones I have right now they (Srixon) are saying are very, very close.” For him, it’s obvious that there is no time like the present to get his equipment sorted out in advance of what is coming. “Some people will start January 1 with no issues and other guys, they are going to need some time to get used to it. But eventually, give it six months or whatever, and everyone is going to be on the same page,” he said. “ I expect most guys on Tour in the fall to start after the season, to start kind of playing with their stuff and getting used to it for the upcoming season.”
There is some back channel chatter amongst those in the know on Tour that the groove change is going to put an increased emphasis on ball striking. Some are of the opinion that those who are considered weaker in this category will suffer once the new grooves are in play. “ If the amount of spin that you can put on the ball is limited, I think it's going to put a lot more pressure on our ball-striking abilities and our abilities to put the ball in good places that we can attack the pin from. You're not going to be able to get away with as much,” Furyk said in response to that vein of thought.
The clubs are one side of the equation Tour players are going to have to get sorted out. However, it leaves some room for ball companies to maneuver or alter spin rates in order to potentially compensate for players who may be affected one way or another by the groove modification.
“I think everyone is going to look at the ball and see whether they need to dial it back, make it softer, make it something that spins more,” said Furyk. “I already play a product that spins a lot. I'm not expecting it to be a huge jump but we'll definitely test a lot through the year.”
SOMETHING NEW: Cobra Golf wants to get players into the Sweet Zone. The company announced its new King Cobra SZ Irons (guess what the initials stand for?) that feature a sleek, low-profile club head design and a shortened hosel, which it said results in a low-and-back Center of Gravity (CG). The latest irons from Cobra have a wide sole and heel-toe weighting system; it said to help achieve maximum Moment of Inertia (MOI). In short this product has game improvement written all over it. “The SZ iron offers patented technology and winning performance at an affordable price,” said Brian Zender, General Manager for Cobra Golf. “The SZ has impressed test panels with golfers of various abilities for its high trajectory, forgiveness, distance and feel.” Tom Preece, Vice President of Cobra Club Research and Development, added, “The SZ features a unique patent-pending sole design which keeps the club head centered and stable both at address and through contact. The performance design is coupled with a urethane insert, layered across the back side of the entire face, which dampens unwanted vibration and gives great feel.” The King Cobra SZ irons are available in men’s graphite and steel shafts (4-GW), and women’s and seniors’ graphite (5-SW). The SZ sets have a suggested retail price of $720 (graphite) and $600 (steel) per set.
ALOHA BABY: The opening venue on the PGA Tour each year is being sold. The infamous Plantation Course, owned by Maui Land & Pineapple Company, Inc. (MLP: NYSE) is being bought by TY Management Corporation for $50 million. The proceeds of the sale will be used to reduce Maui Land’s debt.
"In this transaction, we will receive cash for the sale of the land and improvements, and will continue to operate The Plantation Course under the Kapalua brand with our golf management team," stated Robert Webber, president and CEO of Maui Land & Pineapple Company, Inc. "We expect our golf team, led by Gary Planos, to continue to operate The Plantation Course in a manner that has led to Kapalua Resort's world-wide recognition as the number one golf resort in Hawaii and host site for the prestigious PGA Tour season opening event, the Mercedes Benz Championship. We would not have entered into this transaction if the new owner did not share our commitment to provide the highest quality golf experience and to work closely with us to maintain a seamless and integrated resort experience for our guests and residents."
OH BOY! The Bag Boy Company has introduced the Navigator 2, a highly advanced electric walking cart, to its product roster. It is equipped with a patented Gyroscopic navigation system and is six inches shorted in length, according to the company, than the original Navigator and takes up 20% less space when folded. Bag Boy said the Navigator 2 is highly intuitive and maintains a straight path even on the toughest terrain.
“The improved navigation system provides for smoother operation and the new compact size makes handling and storage easier,” said Craig Ramsbottom, President of The Bag Boy Company. “Fully operational via the remote control, the Navigator 2 is the ultimate ‘caddy’ when walking the course,” he added.
The new Gyroscopic technology found in the Navigator 2 over the original magnetic based system includes never needing to recalibrate the electronics and no interference from steel shafts and metal buildings, Bag Boy said. An updated soft braking system allows for smoother operation and the lower profile, wider wheels provide better traction, according to the company. The Navigator 2 also features a full directional remote with reverse and speed control, automatic downhill braking, 360° rotating front wheel, and a retractable fourth wheel stabilizer to prevent the cart from tipping over on steep inclines.
Twin calibrated 140-watt motors power it and a 34-amp dry cell battery that is covered and mounted on a battery tray. Available at golf retail and green grass shops nationwide, the Navigator 2, backed by a 2-year warranty on the cart frame, motor and gearbox as well as a 1-year warranty on all other parts including the battery, has a suggested retail price of $1,995.00.
ONE DOOR CLOSES, ANOTHER ONE OPENS: When it was announced last year TaylorMade was buying Ashworth, the deal had a ripple effect on its rival, Callaway Golf (ELY: NYSE). Ashworth had a licensing deal with the maker of Big Bertha clubs to supply it with Callaway branded apparel. However, the acquisition provided the company with an out clause and considering it was looking at becoming extraneously business partners, the decision was a foregone conclusion.
Perry Ellis International (PERY: NASDAQ) has been selected to replace Ashworth. The company will design, manufacture and distribute Callaway golf and sportswear apparel in the U.S., Canada, Latin America and the Caribbean. Terms of the agreement are not being disclosed.
Perry Ellis International will service department and specialty stores and corporate channels, while Callaway Golf will service the green grass, off course and sporting goods channels through a newly created soft goods sales force.
Perry Ellis International will also perform the embroidery, embellishing and warehousing of products for Callaway. During the remainder of 2009, Callaway will continue servicing the market with product produced by Ashworth. Perry Ellis’ designs are expect to begin shipping in the spring 2010.
STOCK WATCH: Is this the start of something? The stock market began a rally off of its 12-year lows two weeks ago after several banks reported being profitable in the first two months of the year. The question now is whether there is still enough good news yet to come to maintain the momentum equities have generated? The first quarter of 2009 is nearing an end and soon the focus will shift to corporate America’s financial performance during an intensely difficult period.
But in the meantime, stock prices continued to push back with a second consecutive week of gains.
The Dow rose 0.8 percent, the first time the blue chip index posted back-to-back weekly gains since the period ended May 2, 2008. The S&P 500 rose 1.6 percent and the Nasdaq added 1.8 percent for the week.
ARE YOU GAME? In these unprecedented times, everyone is looking for ways to make a dollar go further. Sometimes the answers are more apparent than others. However, it can become a challenge after some of the more obvious solutions have been explored. The Fairmont St Andrews, an award-winning, 5-star cliff-top resort and a dream destination for golf enthusiasts is encouraging Americans to enjoy a once-in-a-lifetime trip that has become more affordable with the recent strengthening of the U.S. Dollar. In fact, the opportunity is closer to anyone’s budget than perhaps you realize.
Since last summer, the exchange rate has improved by nearly 25 percent. Currently, £1 GBP is equal to approximately $1.45 USDs as opposed to seven months ago when it was equivalent to $1.87 USDs. Furthermore, the forecast suggests the GBP may drop to an unprecedented $1.40 USD within the next six months. This is down from a high of nearly $2.10 USD per pound in February 2007 – meaning a trip to Scotland today is less than 75 percent of the cost it would have been two years ago.
“The dollar is the strongest it has been against the British pound in more than five years, and this presents a wonderful opportunity for travelers from the U.S. to visit the Home of Golf,” said Charles Head, general manager of Fairmont St Andrews. “St Andrews is a magical place. If you’ve never been, you simply must come. And, if you haven’t visited in a while, we have plenty of great new experiences waiting for you. There hasn’t been an opportunity this good for the trip in years.”
Fresh from a £17 million enhancement project, the Fairmont St Andrews itself is perhaps the most spectacular new experience awaiting visitors is. The resort recently was named the Hotel of the Year by the Golf Tourism Scotland. The enhancements include the unveiling of Fairmont St Andrews’ new Kittocks Course, a stunning coastal golf course with spectacular views over the Eden Estuary and beaches of St Andrews. It will be capped this summer with the grand opening of the newly remodeled Torrance Course. Already selected as the host site for the 2009 Cleveland/Srixon Scottish Senior Open and as the final qualifying venue for the 2010 Open Championship, the Torrance Course promises to take its place as one of the finest layouts in St Andrews. Next year the Open Championship will be back in St. Andrews, again thrusting it back on the worldwide stage. Suffice is to say securing accommodations or a tee time won’t be as easily accessible as it will be in 2009.
There may never be a better time for those interested in visiting St Andrews. Travelers who book and pre-pay for their stay at Fairmont St Andrews 21 days in advance receive a discount of up to 30 percent off the resort’s “Best Available” rate through the Fairmont SAVERS program.
During a stay, visitors to Fairmont St Andrews also may access other celebrated St Andrews area courses, including the newly opened Castle Course, ranked the No. 1 Best New Course of 2008 by T&L Golf, Kingsbarns Golf Links and Carnoustie Golf Club, host sites of the Alfred Dunhill Links Championship, the Old Course, the most famous course in the world and site of the 2010 British Open, and others. And for those in the family who may not want to play golf every day, Edinburgh is an amazing city attracting 1 million visitors a year, making it the second most visited tourist destination in the United Kingdom, after London.
The Fairmont St Andrews sits on 520 acres of stunning open coastline overlooking the North Sea and the historic town of St Andrews. In addition to exceptional golf and a world-class spa, Fairmont St Andrews includes award-winning dining, luxurious guest accommodations and exceptional service, as well as unfettered access to the charms of St Andrews itself.
For reservations or more information, please call 1 (800) 257-7544 or visit www.fairmont.com/standrews.
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, 27 January 2010 10:55)
VOLUME 12, NUMBER 11
Web Street Golf Report
VOLUME 12, NUMBER 11
Monday, March 16, 2009
MORE OF THE SAME IS EXPECTED: There remains plenty of mystery over of the upcoming selling season for golf equipment. While the Masters, less than a month away, has historically signaled the start of the true selling season in the US, the early signs in 2009 indicate it could be a very ugly year.
Last week, Dicks Sporting Goods (DKS: NYSE) reported its 2008 fourth quarter sales. While it seems the world has changed dramatically since the final quarter of last year, it’s worth noting how one significant vendor to golf companies finished up the campaign and its view towards the immediate future. In last week’s issue, Golfsmith (GOLF: NASDAQ), which was identified recently by proprietary research published by the Longitudes Group as the off course retailer with the most golfers served at 3.16 million, or over 11% of all golfers, revealed the average order dropped below $100 in the fourth quarter.
The news for Dicks Sporting Goods wasn’t much better as it reported same store sales declined 20.7% in its Golf Galaxy locations. Longitude reported Golf Galaxy is second, behind Golfsmith, in off course retail chains that serve golfers, 3.04 million, but moved into the top spot for share of total square feet it occupies at 1.43 million.
The plight of the 2009 golf industry is still yet to be discovered but its safe to conclude that 2008 ended up rolling in with a few flat tires. Meanwhile, Dicks told the financial community it wrote down its investment in Golf Galaxy by $164.3 million for goodwill and other intangible assets it acquired as part of the original deal in February 2007. The retailer invested a considerable amount of money into being a major player in the golf business and for the time being it doesn’t appear there hasn’t been much of a return coming back to it. “We anticipate the golf business to continue to be difficult,” said Ed Stack, Chairman and Chief Executive Officer. “You should anticipate the comps in our Golf Galaxy plan (to be) similar to what they were in the fourth quarter. We think the best course of action is to anticipate the results of the fourth quarter (will) continue,” he expressed to financial analysts.
With Golf Galaxy down 20% in the fourth quarter and the expectation that its going to continue the question was raised at what point would management have to close down some stores to improve the economics of the overall organization. “We think that is premature right now. I think we are going through one of the worst economic cycles we have some (might) argue since 1929. We think that there will be consolidation of the golf business also. If this continued for 24 months or 30 months then I think we would probably have to make some decisions. At the present time we think that we have got a plan in place to better and improve these sales,” Stack countered.
Dick's Sporting Goods Inc., announced a fourth-quarter loss of $104.4 million on write-downs mostly related to its acquisition of the Golf Galaxy chain. Quarterly sales dipped less than 1 percent to $1.21 billion. For the full fiscal year, the retailer reported a loss of $35.1 million compared with a profit of $155 million the year before. Excluding one-time items, the company said it would have booked earnings of $138.9 million. Full-year sales rose 6 percent to $4.13 billion from $3.89 billion, mostly due to new store openings and the November 2007 acquisition of Chick's Sporting Goods.
FLAT IS THE NEW UP: The trend among public reporting companies is not to issue financial guidance in 2009 to the investment community. The economy being a moving target, it’s making it difficult for insiders to get a read on their respective businesses.
Callaway Golf (ELY: NYSE) is one of those companies that have decided to forego offering analysts some color on the business. But it hasn’t stopped Big Bertha’s board of directors from generating some internal targets for its senior management to be rewarded with in the event it can be achieved.
On March 4, 2009, it was determined that each of the Company's executive officers would be eligible to participate in the 2009 Compensatory Arrangements Program. The established target award is represented as a percentage of base salary for each of the executive officers as follows: 100% for George Fellows (President and CEO) and 55% for each of Messrs. Steve McCracken (Chief Administrator Officer, Sr. Exec. VP and Sec.), Brad Holiday (Chief Financial Officer, Principal Accounting Officer and Sr. Exec. VP), David Laverty (Sr. VP of Operations), and Thomas Yang (Sr. VP of International).
Nothing out of the ordinary here, other than one item as in years past. The payment of the 2009 bonus program is based on corporate net income goals calculated on a currency neutral basis as compared to 2008 levels. So management is being challenged by its Board of Directors to accomplish in 2009 what is did in 2008.
This is perplexing on a couple of fronts. First is the matter of currency neutral earnings. Given the recent strength of the American dollar it has created a significant headwind for all corporations who do business globally. But the sticking point in this is that Callaway management “earned” a bonus in 2008 that wasn’t determined on currency neutral standards, yet benefited from it. Brad Holiday stated on the fourth quarter conference call that earnings were sweetened by $11 million in 2008 versus 2007, based on currency moves alone. So when the going gets tough, the standard is lowered to reflect market and economic conditions? Wonder if those same standards apply to the rank and file who look to Callaway Golf for employment?
Second, while the company isn’t prepared to share with Wall Street or its shareholders its operational expectations, the Board of Directors has accepted that repeating 2008’s financial performance with the caveat it isn’t responsible for foreign exchange rates is good enough. The payoff is quite generous given the current climate and it could be argued that it’s the equivalent of double dipping for delivering the same performance, be it under different circumstances. Prior to the 2008 fourth quarter, management rarely acknowledged or discussed the benefit that a favorable foreign exchange rate aided and abetted its bottom line. It wasn’t until it became a deterrent that it became a talking point to the Street.
It leaves one wondering how Callaway’s institutional shareholders feel about its management or more so anyone on the sidelines who might be intrigued at deploying assets into shares of the business...
BEST SELLER PROMISES TO BE BETTER: Cobra Golf has introduced its new 2009 King Cobra Baffler TWS. The initials stand for Triple Weighting System, which is incorporated to enhance the Moment of Inertia (MOI) properties and lower the Center of Gravity (CG), according to the company.
“The Cobra Baffler has been the best-selling utility on the market since March of 2006, providing players with unmatched performance from a variety of lies,” said Brian Zender, General Manager of Cobra Golf. “The new Baffler TWS is designed for players seeking a versatile, easy-to-hit alternative to long irons. We’ve taken the previous Bafflers’ proven
technologies and made them even better.”
Tom Preece, Vice President of Cobra Club Research and Development, stated, "The new Baffler TWS improves and enhances the performance of Cobra's industry-leading Baffler utility. We've lowered the CG location to create a slightly higher launch angle and increased the MOI for even greater forgiveness and consistency across the entire hitting area. The face area has also been made slightly larger to drive higher ball speeds on off-center hits. And the contoured sole design insures that the Baffler's unique blend of forgiveness, playability, and versatility remains unmatched."
Cobra has begun shipping its Baffler TWS Utility Metals. They carry a suggested retail price of $175 (graphite shaft only).
FEET DON’T FAIL ME NOW! Callaway Golf (ELY: NYSE) has enjoyed growth for an extended period of time in its accessories category. Both in terms of revenues in recent years, but also in the breath of its offerings. Callaway under the direction of CEO, George Fellows has branched out and leveraged its brand equity to go beyond simply clubs and balls. The Callaway name is now featured on range finders, golf bags, training aids, time pieces, eye wear and travel gear to name but a few. The company was built on the platform of technology and it’s using some of its inherent resources along with help from third parties to extend its reach beyond its traditional product roster.
In 2009, Callaway has added Hyperbolic Footwear to its product offerings. The company said it enlisted its in house R&D resources, devoted to the club side of its business, in the construction of the show. The bottom of the shoe, for example has a composite appearance, which was influenced by the involvement of its R&D department, company officials said. “This shoe keeps you low to the ground,” explained Johnny Rodriguez, senior manager of marketing for Callaway Golf footwear and accessories. “Its one of those shoes you sit in rather than sit on top of. There isn’t a lot of movement in it with your foot.”
Insole with Shock Heel absorbs impact for long lasting comfort, Callaway said, while Outlast Technology absorbs and releases excess body heat to create a pleasant and consistent microclimate regardless of temperature conditions. “The Outlast material we are using is used in the ski industry a lot. The material actually regulates the temperature in the shoe and that will maintain your comfort,” he said. Sales reps with the help of a vile, have demonstrated to accounts the visible technology that would otherwise go undetected unless some wore the shoe. The material turns into a liquid, Rodriguez said when placed in your hand as if to simulate cooling of your foot. But when it turns cool outside, it returns to a solid form to keep the heat trapped inside of it. “This material hasn’t ever been used in golf shoes,” Rodriguez said whereas its been has predominately used in ski and fire boots.
The uppers found in the Hyperbolic are completely made of micro fibers, which is another point of differentiation for the company. “Its not that prominent in golf shoes yet,” said Rodriguez. “Although we are starting to hear that there are a couple of other companies looking at this material as well. It is used in basketball shoes, for example. The key to the micro fiber uppers is that it doesn’t stretch out as much as leather. It keeps the foot snug; where as leather over time is going to stretch. The micro fiber will loosen up but it won’t stretch as much as leather does,” Rodriguez explained. “As golf is becoming more athletic, guys are swinging at the ball a lot harder, you need that type of support of the feet.”
The Hyperbolic also features new Chevron Comfort spikes, which Callaway said provides better grip, greater control and maximum power. “Its a spike that we created,” said Rodriguez. “They have shrouded dynamic legs, so they increase the strength and prevent clogging.”
As the apparel industry has undergone a transformation in recent years with the advent of micro fiber materials to place an accent on performance to complement fashion, Callaway is hoping to make some inroads into the footwear business with its Hyperbolic introduction. The shoe, which is available today, carries a retail price of $179.99. Rory Sabbatini is one player on the PGA Tour who has moved into the product this year. As a branding element, the company’s trademark Chevron is featured on the side of its shoe.
Callaway Golf said it has proprietary moisture management technologies in its XTT Comp Footwear line. “This is our way of taking a traditional saddle shoe and giving it some styling,” Rodriguez told Web Street. “We looked at a lot of European styles on the lines of European dress shoes and we incorporated it into this shoe.”
Independent XTT technology works much like an automobile’s suspension system, adjusting at all times to changing surfaces and slopes, Callaway said. “The spikes on this shoe can independently rotate up to 360 degrees. They offer the best stability and contact with the ground. This shoe actually has a lot of technology in it,” he added. Built into it is XWT (extra width technology), which gives golfers the ability to adjust and custom fit their shoes. “There are a lot of people out there that have one foot that is bigger than the other. This is a way for someone to take his or her shoe and almost custom fit it per foot. Or if your traveling and one day the shoes feel a little too tight there is away to create a little more room in it. It creates more volume in the forefoot. It’s interesting a lot of think its increases in width. It doesn’t, what it does is increases in volume,” explained Rodriguez. He said the XWT is incorporated into all of its shoe line that retails for $99 and above. So for those players who gravitated towards interchangeability in clubs, Callaway’s shoes provide a similar feature within its line up. “If you look at our entire line up, Hyperbolic is really a statement shoe, but we expect to see the XTT Comp the most,” Rodriguez said. The XTT Comp is priced at retail for $149.99. “We are targeting a certain price point and we wanted to give it at much (technology and fashion) as we possible can to be successful.”
A FEW MORE OPTIONS TO CHOOSE FROM: Titleist has introduced the new Scotty Cameron Studio Select Kombi, a high performance line of mallet putters. Each Kombi model is precision milled from lightweight 6061 Aircraft Aluminum and features Studio Select weighting technology. The line incorporate a thick face and three-point weighting, that is, weights in the heel, toe and back.
The combination of the three-point weighting technology and a deep Center of Gravity, according to Titleist, produce a balanced putter that is stable throughout the stroke for forgiveness and great roll.
“The addition of the Kombi mallets to the Studio Select family of putters is the result of a combination of our work with players at the Putter Studio and on the practice greens across the worldwide professional tours,” said Scotty Cameron, Master Putter Designer, Titleist. “We listen to their feedback and understand their preferences in a putter. The new Kombi advanced mallet-style putters have been used and validated at the highest levels of competition. Most importantly, they instill confidence, feel great and work perfectly for those players that need or prefer a mallet style putter.”
The Standard Kombi putter comes with circular weights in the heel and toe that allow for a variety of length and weight combinations to fit any putting stroke or style. This flexibility makes it easy for golfers to choose a Kombi putter with the length and weight they require. On the Kombi Mid and Long putters, the rear circular weight is replaced with a central bar weight to create the optimum head weight and balance for the longer lengths, Titleist said.
All Kombi putters feature a double-bend stepless shaft with a full shaft of offset. A misted topline with a sight line along the rear edge reduces visual thickness and makes face alignment easy, according to the company.
“Different golfers require putters of different lengths, weights, body and neck configurations,” said Cameron. “However, most putter heads are only weighted for 35-inch shafts and therefore, are much too light for shorter lengths, or too heavy for longer lengths. Too often, the same heads are used in all lengths. The result is the golfer having to hit at the ball instead of being able to stroke the ball, and that creates distance control problems. The Kombi putter line delivers a wide range of specifications and options for players who prefer the advanced mallet design.”
The Studio Select Kombi and Kombi Mid feature 4 degrees of loft and 71 degrees of lie, while the Kombi Long offers 4 degrees of loft and a 79-degree lie angle. All three models can be bent plus or minus 2 degrees.
Scotty Cameron Studio Select Kombi putters begin shipping April 1 with a MSRP of $325 (MAP: $299).
GETTING THE SHAFT: The numbers pretty much sum it up. Shaft manufacturer, Aldila, Inc. (ALDA: NASDAQ) reported net sales of $11.5 million for the fourth quarter ended December 31, 2008 as compared to $17.7 million in the same quarter of 2007. It delivered a net loss of $1.3 million for the fourth quarter of 2008 compared to a profit of approximately $771,000 after factoring out a one-time gain it realized with the sale of its 50% interest in Carbon Fiber Technology LLC.
For the year ended December 31, 2008, net sales were $53.6 million as compared to $69.1 million for the year ended December 31, 2007. Aldila reported a net loss of $2.5 million for 2008 as compared to net income $5.7 million for 2007 backing out its one time gain.
"Our fourth quarter of 2008 showed continued weakness and reflected the slow retail environment widely reported across all market sectors, with 2008 proving to be one of the weakest years in equipment sales on record,” stated Peter Mathewson, Chairman of the Board & CEO. “We expect the first half of 2009 to be particularly challenging until some level of consumer confidence is restored and our customers revert back to normal ordering patterns. With the high level of uncertainty caused by the deteriorating economic conditions, the Company has taken steps to reduce cost in 2009, including a general salary freeze, cutbacks in personnel at our Mexico facility, reduction in advertising and marketing spending, reduced travel and other cuts in selling, general and administrative expense."
Mathewson continued, "While market conditions are unfavorable, we have aggressively pursued market share gains as we believe this is critical in the current environment. We have been successful in landing some key programs with two major club companies to whom we have not had significant sales in the recent past. With the addition of these new accounts, we now have a strong position in all but one of the top ten club companies in the U.S. We believe this will help reduce the effect of the uncertain first half of the year. With the addition of these new programs we believe that our market share should increase in 2009 and 2010. The bulk of the programs are scheduled to begin in the second half of 2009 and continue through 2010," Mathewson said.
STOCK WATCH: What a difference a week can make. While the financial markets have been on a death roll for what seems like forever, last week proved that there is still some life left in the bulls.
The week began on a promising note as stocks soared after Citigroup said that it had a profitable January and February. Perhaps more important were comments made by Federal Reserve Chairman Ben Bernanke when he said he believed the recession could end by the conclusion of 2009 if the banking industry were to be stabilized.
And with that equity prices were off to the races as investors were delighted to put some money back to work by buying stocks. It turned out to be the strongest week in nearly four months as several upbeat forecasts from U.S. banks helped power a four-day rally for financials and the broad market. The Dow advanced 9%, the S&P 500 index jumped 10.7% and the Nasdaq posted a 10.6% gain. Happy days are here again! Well, before we get too excited it remains to be seen whether financial markets can continue their ascension or return back to their previous pattern...
SEEING IS BELIEVING: Encanterra, A Trilogy Country Club has unveiled an aggressive program to allow prospective members an opportunity to “test drive” a membership in the highly honored new Arizona private club.
Called a “Taste of Trilogy,” the program allows prospective members to take a weekend mini-vacation at the club, enabling them to experience the lifestyle, amenities and service offered while getting to know current club members and staff. Priced at only $149 per couple, it includes:
· Four days & three nights in one of the beautiful homes (available Sunday through Thursday)
· Two meals for two at its Bistro, including some wine or cocktails
· Access to the private championship golf course, created by PGA Tour veteran and former Ryder Cup Captain Tom Lehman and his Lehman Design Group and selected among the Top 10 Best New Private Clubs by GOLF Magazine and among the Best New Private Courses in the U.S. by LINKS Magazine
· Unlimited use of athletic club
· Dinner with a member of Encanterra at a local restaurant of your choosing
For those who want to stay a little longer, a weeklong stay is also available. “There is a lot of uncertainty in the marketplace right now,” said Jeff Teich, general manager of Encanterra, A Trilogy Country Club. “People are being very cautious before they make any financial commitments. We thought this would be a great way to let them experience the club just as a true member would. It takes the uncertainty away and helps them understand just how special this club and this lifestyle truly are.”
Currently, there are five membership categories: Golf, Social, Associate, International and Invitational available at Encanterra. A Social membership is required upon purchase of a home at Encanterra, and a Golf or International membership is optional for an additional initiation fee. Non-residents of Encanterra may join the club via an Associate or Invitational membership. These membership categories grant equal access to all amenities.
All memberships are right-to-use (that means no member assessments) with flexible three, five- and 10-year financing programs available for initiation fees and low monthly dues with unlimited access to golf. For a limited time the club is offering a variety of special introductory offers for membership.
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 10:14)
VOLUME 12, NUMBER 10
Web Street Golf Report
VOLUME 12, NUMBER 10
Monday, March 9, 2009
NO SLOWING DOWN JUST YET: TaylorMade-adidas Golf was able to succeed where its competition appeared to fail. The company posted sales gains in its fourth quarter of 2008 and made money too. Its two chief rivals, Callaway Golf and the Acushnet Company (Titleist, FootJoy and Cobra Golf) both reported lower revenues in the same period and a loss from operations.
TaylorMade said 2008 fourth quarter sales were € 195 million, an increase of € 3 million from the previous year. The final chapter of ’08 came in as the second largest quarter by revenue recognition in the year only trailing its second quarter which saw sales of € 226 million. Three out of the four quarters in 2008, TaylorMade reported higher revenue numbers. The irony is that its second quarter (its largest) was the only time frame it wasn’t able to exceed the prior year’s results. The company said its fourth quarter operating profit was € 24 million, on par with the previous year. But it appears there was some help getting to this level. In the fourth quarter the company acquired Ashworth. According to adidas’ annual report, the Ashworth deal positively impacted the operating proﬁt of the TaylorMade-adidas Golf segment, due to a one-time gain of € 21 million. However, it was partially offset by restructuring costs and other one-time expenses of € 7 million. Still it implies a one time net gain of € 14 million.
Looking back over the full 12 months of 2008, TaylorMade enjoyed sales of € 812 million up from € 804 million in 2007. Its operating proﬁt increased 20% to € 78 million in 2008 versus € 65 million in 2007. The bottom line was aided by another one-time gain of € 5 million on the sale of Maxfli, adidas reported.
TaylorMade’s revenues were dominated by its metal wood products, which represented 38% of its 2008 revenues or approximately € 308.6 million. According to adidas, TaylorMade is the clear market leader in metal woods (drivers, fairway woods and hybrids). The brand is particularly strong in the USA, it said, where it has forged a 30% share of the market and a large lead over its strongest competitor. It also said the Burner family of drivers accounted for approximately 15% of TaylorMade-adidas Golf sales in 2008.
Under the heading of hardware, which adidas defined as irons, putters, balls, bags, gloves and other accessories it generated 33% of its revenues or approximately € 268 million last year. Footwear was 9% of revenues or € 73 million and apparel was 20% of its business or € 162 million. According to its parent company, TaylorMade’s, current products (i.e. products launched in the last 18 months, which is the typical product life cycle in golf it said) represented 92% of total hardware sales versus 2007 when it was 75%.
DO YOU WANT TO PLAY? This past weekend marked an aggressive promotion north of the border. In anticipation of the upcoming golf season and arrival of TaylorMade’s R9 driver Golf Town - Canada's largest golf retailer with 41 locations coast to coast offered a $100 certificate toward any additional TaylorMade or adidas products purchased through Sunday, March 8.
"The R9 is among the year's most anticipated introductions and we are pleased to be one of the first to offer Canadian golfers this leading-edge product," stated Stephen Bebis, President and CEO. "Our vast selection, including equipment from the industry's top manufacturers such as TaylorMade and adidas, ensures a wide-range of options for every type of player." It was valid only when redeemed in conjunction with purchase of the R9.
THE LUCK OF THE IRISH: Long shots have been known to pay off. Drama is what defines sports and makes it the most compelling reality show worth watching. Its rare when someone wins two major championships in a year that isn’t named Tiger. But it happened and who knows when it might again? While most of the golf media devote a majority of their words to the world’s #1 player, the reigning Open and PGA Champ has an opportunity to make it three in a row. His equipment company of choice has announced a fun promotion to commemorate the Irishman’s quest to add a green jacket to his wardrobe.
Wilson Golf, the Chicago-based company, which boasts more major titles won with its irons than any other manufacturer, announced the "Paddy Slam Countdown" promotion. If Padraig Harrington wins the 2009 Masters golf tournament in Augusta, Ga., this April, registered consumers will receive $300+ worth of free clubs with the purchase of a set of Wilson Staff irons.
To be eligible for the promotion, consumers must register at www.paddyslam.com <http://www.paddyslam.com/> between March 1, 2009, and midnight on April 8, 2009. (There is no purchase necessary to register.) By registering, consumers qualify for two free clubs that are currently being carried by Harrington: a FYbrid fairway utility and a Tw9 tour-milled wedge ($350 total retail value) - with the purchase of a set of Wilson Staff irons.
"Padraig is looking to make history next month in Augusta, and we'd like to give his fans an added incentive to cheer him on and share in his success," said Tim Clarke, general manager of Wilson Golf. "Wilson Staff irons are the centerpiece of Padraig's game, but he also relies on our fairway utilities and wedges to master the ‘long and the short’ ends of his fairway play. What better way to promote these great new clubs than to put them in the hands of thousands of golfers for free?"
This promotion is available for the purchase of Di9 (distance), Ci7 (control), Pi7 (performance) or Fg59 (forged) irons. The free club offer will be fulfilled directly by Wilson Golf. Complete terms and conditions are available at www.paddyslam.com <http://www.paddyslam.com/> or www.wilsonstaff.com/paddyslam.
IT IS GOING TO COST: It remains to be seen how much the effects of the economy will dampen the new product introductions by equipment companies in golf. Compressed life cycles have been one area that retailers and the peer group have lamented with respect to the playing condition towards making money. But if the big bad wolf called the economy doesn’t force companies to rethink the frequent velocity of new product introductions, there may be another deterrent on the way shortly.
The USGA informed the manufacturing community that beginning with all club submissions received on or after April 1, 2009, it will begin charging for official conformance evaluations. According to the governing body, the reason for the change of policy is to partially defray the cost of services provided by the USGA’s Research and Test Center and to more equitably distribute the cost of that support among the all equipment manufacturers. The cost of doing business in general never seems to decrease, but there is an added step now that involves the USGA, which its safe to say wasn’t budgeted for when equipment companies began 2009. At the same time there doesn’t appear to be a viable way for a pass through the expense either. The cost itself isn’t necessarily prohibitive but it may add up over the course of a calendar year.
Metal woods and hybrids will run $150 each. Keep in mind that several equipment companies have employed multiple driver models within a micro brand. Iron sets are $500 with individual iron heads $150. The USGA is charging $50 for putter and “other” which it stated as tees, gloves, shoes, etc.
There will continue to be no charge for the USGA’s opinions regarding potential conformance of prototypes, mock-ups, or concepts of golf equipment technology communicated to it. There will also be no charge for re-submissions of clubs or other items that were submitted prior to April 1, 2009.
The USGA has charged for golf ball evaluations since 1979. During this time it has not generally charged for evaluations of golf clubs. But as club technology has advanced in recent years, the USGA said it has dedicated a substantial increase in the amount of time, expense and sophisticated research to evaluate clubs for conformance with its rules. In addition, during the same time period, the number of equipment submissions to the USGA has also increased significantly.
IN FOR A PENNY, IN FORE A POUND: In last week’s issue the effects of fluctuation on foreign exchange rates came under scrutiny by a Wall Street analyst with respect to Callaway Golf. The relationship extends to a broader scope in golf. The British Pound, and a decline in its value to its American cousin is also something that may have an impact on the Open Championship being held at Turnberry this year. Case in point, a year ago the pound was trading above $2 whereas today it’s hovering around $1.40-ish and it puts the R&A in somewhat of a peculiar if not awkward position.
The Open fund was worth £4.2 million in 2007 and 2008, or roughly $8.4 million. But today the same amount translates to under $6 million, putting it behind more than a dozen PGA Tour events, all of the WGC tournaments as well as the three other “majors.”
"The Open is in a slightly peculiar position because of the movement in the exchange rate," Peter Dawson, chief executive of the Royal and Ancient admitted to the Scotsman newspaper. "Last year, in dollar terms, we were the most lucrative major. This year we've fallen back to bottom of the heap. So that's something we might need to look at. For us, of course, that's offset by the rise in our TV revenue. We won't make a determination on prize money until nearer the championship.”
The R&A chief did say the news isn’t all bad with respect to the exchange rate. "The rise of the dollar against the pound is good news for us because so many of our TV revenues are dollar denominated. But it's fair to ask if it's right to put more into prize money at a time when things are so difficult. Frankly, I wouldn't expect golf tournaments generally to be raising prize money this year."
KEEPING AN EVEN KEEL: It has long been a standard in fairway wood design for the sole to act as a keel to promote a square face as it moves through the dirt. However, as the fairway woods have evolved into bigger heads with a deeper Center of Gravity (CG) and higher Moment of Inertia (MOI) properties, the tendency for the club to make impact with the ground and push shots off target, increases. With the design of Nike Golf’s Quad Keel Sole in the new SQ DYMO and SQ DYMO² Fairway Woods, the potential for turf drag is eliminated, the company said, and the benefits of having a larger club head is maximized.
Nike said its Quad Keel Sole design angles four critical sole quadrants to minimize interaction between the ground and the sole of the club. The minimal interaction promotes greater club head speed, which should translate into distance enhancements, while providing an ease for getting the ball in the air. Material has also been removed from the back of the sole, Nike said to reduce friction and drag while in contact with the turf—revolving around the idea that, in fact, “less is more.” According to company officials, Trevor Immelman used the fairway woods at he WGC Accenture Match Play event. He appears to be the first in Nike’s Tour stable of players to employ the product in competition.
Nike’s new SQ DYMO fairway woods are available in men’s and woman’s version in two head shapes as with corresponding SQ drivers. The Manufacturer’s Suggested Retail Price is $276.00
DOUBLE DIP: Golfsmith International Holdings, Inc., (GOLF: NASDAQ) reported volume in its 2008 fourth was off 14% from the prior year. The company said sales came in at $67.8 million compared to $79.0 million in the fourth quarter of 2007. Perhaps more worrisome than lower receipts is a sharp decline in comparable store sales (-17.3%) and its direct channel (23.1%) business, which encompasses its catalog and Internet sales. Golfsmith said it lost $6.6 million from its operations in the fourth quarter of 2008.
Martin Hanaka, chairman and chief executive officer commented, “Our fourth quarter results reflect ongoing challenges in the economic environment. Store traffic was down sharply during the fourth quarter and buying patterns signaled that consumers continue to be very cautious in their spending particularly big tickets. For example, while we were getting a higher than normal conversion rate during the holiday season reflecting that customers were coming in the store to buy, customers were clearly spending less by purchasing lower priced items, a definite move to value. Both average order value and transactions were equally off. In fact our average order dropped below $100 which is unusual for us.”
The CEO acknowledged the environment had an early jump on stimulus plans, a trend being touted in the macro economy. “From a competitive standpoint, there was a tremendous amount of promotional activity in the fourth quarter as compared to the prior year,” he said. “Much of the promotional activities began as early as October and continued throughout the holiday season with a variety of promotions. We were more promotional as well with two major marketing pieces that we had not done on the previous year; a direct mail piece and a free standing insert again over and above the prior year. In addition, we offered discounts on the web throughout the holiday's season.”
Despite the increased activity intended to improve sales, it wasn’t met with the expected anticipation as attested by its revenue figure during the quarter. Hanaka thinks, however, the deal making has an upside to it in the longer run. “The positive side of all this is that this discounting is a reality that smaller and less well capitalized competitors will not survive this downturn leading us hopefully in a better position as we come out the other side of this great recession,” he said referencing his retail peer group.
“In terms of product categories we saw slow down on club business and did not get the benefit that we hope to capture from the new product launches that were pulled forward. However, the custom club business was a bright spot within this category. Reduced pricing and drivers also impacted sales including some pressure on a proprietary business. We also saw softness in our apparel and accessories business during the quarter, which led to heavy increases in close activity for apparel which had continued through February,” he added.
While the world has changed since the final three months of 2008 and the outlook isn’t necessarily improving, according to the Hanaka. “Looking ahead to 2009, the retail environment remains difficult,” he said. “We will continue to carefully control expenses, manage inventory levels and focus on cash preservation. Looking ahead we are making every effort to keep the customer engaged by enhancing a strong selling culture and an educational interactive environment for our guests. Additionally, we are seeing various stimulus programs from our vendors as they try to provide customers with value added offers, which hope to drive business this spring. We're also shifting our marketing spend more from direct toward retail, which we are finding to be a more effective use of our marketing dollars. We have reduced our marketing expenditure -- in term of our catalogs circulation with two books scheduled for the first quarter, down from three in last year's first quarter,” he explained.
The Company said it would limit earnings guidance to the upcoming quarter due to murky visibility with consumer buying patterns. For the first quarter of fiscal 2009, same-store sales are expected to decline in the mid to high teens Golfsmith said. For 2008, revenues decreased by 2.4 percent to $378.8 million compared to $388.2 million in fiscal 2007. Same store sales for the year were off 6.3% and its direct channel was down 13.1% over the prior year. These figures will be its new points to compare itself off of as the year unfolds.
IS THERE A POSITIVE TO ANY OF THIS? The pain inflicted by the economy isn’t side stepping any industry or businesses. Everyone is impacted in some way shape or form. While it appears that its all bad, there are some silver linings for those companies that are able to survive the challenging times.
“We think that there could be a real benefit in terms of the industry structure due to this recession,” said Marty Hanaka, Golfsmith’s chairman and chief executive officer. “It is a fact that PGA (Tour Superstore) closed its big store in Buckhead (Georgia) and one other stores is being cut in half. We understand there are a couple of others that they'd like to exit, so perhaps that will happen. And if it does, that really puts us in a good position. We know that our biggest competitor on the west coast which is known as Worldwide Golf and operates under three different brands. It has just closed a couple of stores and one in the desert. We know a store in Carolina, which was a major independent, has closed its stores in the fall of Carolina Custom Golf. We know it's competitor up in the Virginia area, Maryland called Mammoth Golf. So if you look there, I think there have been net about 76 closings up, through October-November, and again we think there will be more to follow. So, there's good news, the people that get through to the other side are healthy, I think, can take advantage of a structural change in this industry. And we believe that we'll be one of those companies.”
RECESSION PROOF? There hasn’t been much in the way of good news lately. But that doesn’t mean it isn’t out there. It’s just harder to find. Recreational golfers showed one way how they were coping with the economy as they started the year off by playing more golf than in 2008. According to research published by Golf Datatech, in cooperation with the National Golf Foundation, PGA of America and the National Golf Course Owners Association, January’s rounds played were higher by 8.6%.
Granted play is essentially confined to the Sun Belt region during this period and therefore, it represents one of the weaker months on the calendar for total volume. However, its merit may be more of a psychological edge than anything else in that recreational play isn’t necessarily evaporating as the American economy continues to hemorrhage jobs. Under the heading of fair and balanced reporting, the economy has shed 4.4 million jobs since the recession began in December 2007, with almost half of those losses occurring in the last three months alone. And unemployment is lasting much longer. Not everyone who has been laid off plays golf, but its safe to say some of them fall under this category. While the latest data on rounds played represents the month of January, it remains to be seen whether it will buckle to the macro economic head winds as spring and summer usher in a new golf season.
FOLLOW UP: Jim Connor, president of FootJoy used the company’s blog site to share some thoughts on the recent decision to shut down its Brockton plant. While large brands often dominate the landscape they compete in, it doesn’t mean they are immune to changing markets. Technologies can shorten the playing field. “Even as late as 1985, the Brockton plant was turning out nearly 400,000 pairs of leather soled, welted shoes and employed over 260 workers,” Connor wrote. “In the late ’80’s and early 1990’s, new construction techniques were perfected in Asia that produced lightweight, flexible, and most importantly, highly waterproof golf footwear—- and the market rapidly moved in this direction. Major competitors launched similar new categories in golf footwear and FootJoy was in a struggle for supremacy in this new competitive realm,” he continued. “The shoes produced in this factory (Brockton) were, by their very construction and use of materials, at a considerable disadvantage in weight, water resistance, and cost. We began what became a twenty-year struggle to maintain and then slow the demise of this unique, but fading product called FootJoy Classics.” Connor outlined the efforts the company made to try and stem the tide away from the demise of the manufacturing method but the rapid decline in volume ultimately was its undoing. “Unfortunately, none of these efforts and investments could slow the declining demand for this old method of shoe making—- our production volumes would have dropped well below 50,000 pair this year, making it impossible to support even the 100 workers that we had left,” he said.
ALL YOU NEED IS LOVE: The battle over golf ball patents appears to be accelerating rather than drawing to a conclusion between Callaway Golf (ELY: NYSE) and Titleist (FO: NYSE). Callaway said it has filed a new patent infringement lawsuit that alleges the new 2009 Titleist Pro V1 and Pro V1x golf balls infringe on it’s golf ball patents. “We were disappointed to discover that Titleist and Acushnet (parent company to Titleist) have again used patented Callaway technology in their Pro V1 golf balls,” said Steve McCracken, Senior Executive Vice President, Chief Administrative Officer, Callaway Golf. “As long as Titleist - or any competitor - continues to introduce products that we believe infringe our patents, we will continue to seek relief in the courts. We expect to prevail in this second suit as well.”
While it may take a rocket scientist to design a golf ball, it doesn’t take one to figure out Titleist’s response on the matter. In a prepared statement it said, “These claims are without merit, as Acushnet has designed its new Pro V1 models to be outside the claims of all Callaway patents. Acushnet has asked the court to rule that the patents asserted by Callaway are not infringed and are invalid.”
Meanwhile, under the heading of a good defense is a strong offense, Titleist pushed back with a patent lawsuit of its own. In its complaint, Acushnet asserts that Callaway’s Tour i and Tour ix golf balls infringe on nine of Acushnet's United States patents covering multi-piece, solid core technology.
“As the industry leader, we respect the valid intellectual property of others and expect others to respect ours,” said Joe Nauman, Executive Vice President, Corporate and Legal, Acushnet Company. “We believe that disagreements like these are best dealt with between the companies involved and we have repeatedly attempted to resolve these disputes. When these discussions failed, Callaway left us with no other course of action but to move forward with this lawsuit. We are hopeful that these matters can be resolved, but we will continue to protect our intellectual property rights. It’s regrettable that one of our competitors would rather compete in the courtroom than in the pro shop,” Nauman concluded. “However, we are committed to seeing these matters through to appropriate conclusions. While all litigation is uncertain, we remain confident that we will prevail.”
STOCK WATCH: Stock prices appear to only know one direction. The Dow Jones Industrial Average, which fell to the lowest intraday level since April 15, 1997 on Friday, lost another 6.2% last week, underscoring the relentless pressure stocks have been under since the eruption of financial and economic crisis last fall. Like the Dow industrials the S&P 500 declined 7% on the week. The S&P 500 has shed 81% in market capitalization since its peak in October 2007. The Nasdaq didn’t fare any better as it dropped another 6.1% on the week and closed Friday at its lowest level since March 12, 2003.
TIGER TRACKS: While the action on the PGA Tour shifted from Arizona to Florida last week, the location that hosted Tiger’s much anticipated return is offering avid golfers a chance to walk in his footsteps. The Ritz-Carlton, Dove Mountain, host to the WGC-Accenture Match Play Championship, is offering a Fairways and Greens package in the ancient majesty of a Saguaro Forest.
The Fairways and Greens package includes overnight accommodations in a deluxe guest room, Executive Suite or Club Level room; a complete American Breakfast for two in the restaurant, or served in-room; two 18-hole rounds of golf daily, including a golf cart, club storage, use of practice facility and required forecaddie from the Ritz-Carlton Caddie Concierge program. (Note: One guest may play two rounds, or two guests may play one round each.) The package is available starting on December 1, 2009 through December 31, 2010 at $529 USD per night. For questions concerning golf and tee times, call the golf shop at (520) 572-3500 or visit www.ritzcarlton.com.
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 10:15)
VOLUME 12, NUMBER 9
Web Street Golf Report
VOLUME 12, NUMBER 9
Monday, March 2, 2009
NO BAIL OUT NEEDED! For those uninitiated to the notion that golf is immune to economic cycles, Tim Finchem, PGA Tour Commissioner put that to rest when he spoke to play at the Accenture Match Play event outside Tucson, AZ. “We (the PGA Tour) are subject to the vagaries of the economic climate to some degree,” he acknowledged. “We take this very seriously. I've seen some reports recently that perhaps we have conveyed the impression that somehow we're immune. I think we've been pretty consistent, going way back, well back into the first part of 2008, when housing started down big-time late in '07 that we were taking this very seriously, and we do.
I think to date we've had, if I can get us sort of to stop right at this point and see, where are we today, we've obviously had and are having some bumps in the road.”
The body count is mounting for the Tour with respect to its sponsorship arrangements. “First of all, of course, the U.S. Bank determining not to extend after 2009. Not a particularly large sponsorship, but nevertheless a financial service company,” Finchem stated, perhaps as a backhanded way of expressing his appreciation for the company’s prior involvement. “The Ginn Championship going off our schedule as we came into the year because Ginn being unable to fulfill their commitments, which resulted in a lawsuit; and then today I will tell you that FBR is not going to continue beyond 2010. Lastly, not so much related to the economy, but questions raised about the viability of Stanford as a company, given SEC action and resultant questions arising out of that,” he continued. Finchem deflected any questions on the Stanford situation due to its ongoing investigation by the Feds.
“Now, to put these bumps in perspective, however, in no particular order, as we've already indicated publicly, we will be playing, because of the strong support we have in the community of Memphis for St. Jude's and the relationship with St. Jude's, the Stanford St. Jude's Open will be played this year without question and in my judgment going forward, regardless of -- I'm not going to comment on the difficulties of Stanford, but regardless of the outcome of that situation, we're going to play,” the Commish firmly stated.
“Obviously in Phoenix, arguably our strongest community-based tournament on Tour and a tournament that raises significant sums for charity every year and a tournament that actually progressed for over 60 years without title sponsorship, I don't have any hesitation in saying that that's not going to have an impact on our calendar. We, of course, have some time until '11 and we'll be working with the Thunderbirds to bring in new sponsorship because that helps generate additional support for the community. When I look at these bumps, I don't see any huge disruptions at this point.”
Tim Louis, Big Chief of The Thunderbirds, hosts of the FBR Open remarked, “While we are extremely disappointed we need to find a new sponsor, we are pleased that we were able to work out a plan that gives us a reasonable timeframe to replace FBR with as little impact or disruption as possible. When FBR told us of their decision not to continue beyond 2010, we concluded that this early transitional strategy made the most sense for everyone involved.”
While the glass may or may not be half empty, in the eyes of the Tour it has made inroads to its tournament funding. “We have completed work on an extension with Accenture to 2014,” Finchem announced, “We will have some additional extensions to announce as we go into the spring. But right now, as if we stopped right now, I could tell you that we have about two thirds of our title sponsors on the PGA Tour secure through '12 or beyond, which makes us feel very good about the viability of our overall schedule,” he added. “If I had to look at it today, and you asked me a year ago and painted the economic picture of what we would be facing at the end of February 2009, I would not have been able to project us doing this well,” he stated. “That's not to say, however, that we are not going to have more bumps in the road, I suspect we will; that we're not going to have more turnover, I suspect we will, as well. There's just too much pressure on too many companies. It would be unrealistic to think that we're not going to have turnover, we're not going to have problems,” he was quick to add.
UPON FURTHER REVIEW: Last week, US President Obama pledged to Americans, “We will rebuild, we will recover, and the United States of America will emerge stronger than before.” His words were intended to sooth the growing anxiety being felt by Americans towards an unknown future. The business climate, to say the least, represents the most challenging conditions many have ever been faced with. That includes the golf industry as it anxiously awaits the remainder of the country opening up for business within the next 30 to 60 days.
Despite a murky economy, looming on the horizon is an impending change that at the very least will force costs to be higher for equipment companies. There may be a bit of a reprieve coming however, as another twist to the plot was revealed last week. The USGA Senior Technical Director, Dick Rugge sent a correspondence to the manufacturing constituents asking for their, “opinion whether or not removing the stipulation that club heads need to be finished prior to the end of 2009 would be helpful to your company.” According to the letter, obtained by Web Street, the final date of assembly and shipping to the marketplace would remain December 31, 2010. Rugge and company are asking equipment companies to share their feelings on the topic as soon as possible, but no later than March 9. The USGA said it would render a final decision regarding this change after reviewing all comments received.
In some small way this could be received as a public relations move by the governing body. Or a chance to give the battle weary club manufacturers a break with their respective businesses as they forecast and plan going into the 2010 selling season for clubs.
THE END TO A CLASSIC ERA: Being number one has its perks. It also has its burdens. To the latter point, more often than not it doesn’t share the same attention as its bipolar opposite. FootJoy, the #1 Shoe in Golf, has announced it will cease footwear-manufacturing operations in its Brockton, MA., facility within the next six weeks. The company dates back to 1857, when the Burt and Packard Shoe Co., which later became known as the Field and Flint Company, was one of dozens of footwear manufacturers that earned Brockton the title ''The Shoe City.'' The city’s collection of footwear factories once upon a time supplied over 50 percent of all domestic footwear in the United States. In 1970, the Field and Flint Company officially became known as FootJoy, Inc.
“This was a very difficult decision made necessary by the declining demand for premium welted, leather soled golf footwear,” said Jim Connor, President of FootJoy in a prepared statement. “While this factory produced a small portion of our worldwide supply of golf shoes, some of our craftsmen and women were from several generations of shoe makers. All of us at FootJoy are deeply saddened by this outcome.” The news of anyone losing a job is never easy to deliver or for that matter determine. When it comes from a business that has a commanding if not dominating market share in sell through of its products to consumers, its rather sobering. The fact being in the minds of management this step was necessary. The Brockton facility was known for its production of the FootJoy Classic shoe.
“It’s less than 10% of our business (in unit terms) and it has not grown materially in the last 10 years,” explained Connor in the December 10, 2006 issue of Web Street. “The FootJoy Classic shoe is well beyond its small volume. It’s the symbolic leader of our product category,” he further explained. Connor’s comments came a few years ago when FootJoy decided to reinvest in the plant after looking long and hard at other potential alternatives. “We went to Fortune Brands with a request for capital, well over a million dollars, to basically take four floors and flatten them into one continuous facility,” Connor shared with Web Street. “In order to save the category we felt we needed to reinvest in that (Brockton) factory,” Connor said in 2006. “It was rapidly becoming unviable. The costs were rising rapidly and efficiencies we could get away with years ago when the volumes were higher and business was different were basically becoming problematic for us. We couldn’t afford to operate it in its current set up,” he explained in 2006.
Times change as well as business conditions, sometimes quickly and now the Brockton facility and its employees are collateral damage to the 2009 world. As a result of the plant’s closure, 103 manufacturing and support positions will be impacted. The Brockton facility produced Classics Tour and Classics Dry Premiere golf shoes and a small line of men’s dress and casual footwear. Those categories will be discontinued; FootJoy said this summer when the inventory is depleted. The company does not anticipate this decision will impact its worldwide sales of golf footwear or its continued leadership of the category in every major market around the world.
The decision represents a painful one in more than one way. Saying goodbye is never easy and especially under difficult circumstances that necessitates it. But Brockton by way of the Classic line represented an important product category to FootJoy. Despite being a small part of its business on volume, which necessitated in part its closure, its importance was the opposite. “The world tour professional basically believes in it and that’s the shoe they go to work with everyday. To the better amateurs and club pros that rely on that product, it’s far more important to our business than the volume would indicate,” Connor explained to Web Street when he discussed the topic back in 2006 with respect to the investment the company made.
Going forward, Tour players will draw upon the inventory for the remainder of 2009. However, FootJoy has future ideas already in its pipeline the Tour, club professionals as well better amateurs to replace the Classic line. It has started somewhat already with the advent of its SYNR-G product, which began appearing on Tour in early 2009 and Dry Joys models.
LOST IN TRANSLATION: The economy is the 2009 bogeyman that all businesses are fearful of. It remains to be seen whether the massive government intervention via stimulus injections can isolate the economic challenges to this calendar year or it extends beyond that and into 2010. However, there is another equally worrisome matter that represents a clear and present danger to many corporate CEO’s and CFO’s other than the overpowering playing conditions. That would be the plight of the US dollar with respect to its sometimes-tenuous relationship to foreign currencies. The fluctuations in this relationship during these difficult times can impact companies that experience a significant portion of their revenues from outside the comfortable confines of the US. This topic prompted one research analyst to reconsider Callaway Golf’s (ELY: NYSE) bottom line in 2009.
Hayley Wolff of Rochdale Research wrote to clients on the matter, which was the basis for revising her anticipated earnings estimate for Big Bertha. She wrote: “The central issue for Callaway is that its cost of goods are dollar-based, while it derives 50% of its sales from the international markets. On the fourth quarter conference call it became evident that Callaway is more exposed to currency swings than had been previously believed. Basically management indicated that 65%-75% of every dollar of sales from FX (foreign exchange rates) flows to the pretax income line. Hence, for the purposes of 2009, currency presented a $0.35-$0.40 head wind on a $0.82 earnings base (including gross margin charges).”
In its fourth quarter conference call, Callaway CFO, Brad Holiday said foreign exchange rates added a net $11 million to the company’s bottom line in 2008 (it reported total net income of $66.2 million) over 2007. In Wolff’s research she extrapolated the currency picture since the calendar turned to 2009.
“Since the end of January the US dollar has appreciated further against key currencies. Based on the current strengthening of the dollar, particularly vs. the Korean Won, together with weak demand for premium priced golf equipment, we are lowering our EPS on Callaway Golf to $0.30 per share from $0.50, with much of the reduction coming in the first half of 2009. Our sales estimate is $990 million, down 11% from 2008,” she wrote.
“In 2008, Callaway generated $563 million of sales in the international markets. Of that total, $191 million was in Europe, $167 million in Japan, $80 million “Rest of Asia” (primarily Korea) and $126 million in Other (Australia and Latin America). We estimate that the UK accounts for roughly 50% of sales in Europe, and Korea generates about $65 million in sales. Since the earnings call, the Euro has depreciated 7%, the Yen 9%, the Korean Won 14% and the Canadian dollar 5%; only the pound has moved in the company's favor (+1.2%). Applying those percentages to the company's sales distribution, we determined that the basket of currencies is off another 6.3%. That translates into reduced sales and earnings of $28 million and $0.27 per share, respectively. We are not reducing our estimates by the full amount owing to the potential for the company to raise prices in some of these markets as well as the challenges in forecasting currency trends,” she expressed.
IN FORE A PENNY, IN FORE A POUND? That might be what the folks at Palm Beach Gardens, FL will argue. News last week surfaced that the UK government agreed to pump billions of pounds and insure some £300 billion (approximately $425.97 billion) in assets of the Royal Bank of Scotland. It was announced after the bank reported the biggest corporate loss in U.K. history. The insurance plan, part of a broader financial rescue package worth more than £600 billion, is seen as the government's last chance to avert a full-scale nationalization of two of the country's largest lenders -- RBS and Lloyds Banking Group PLC. Sound vaguely familiar?
So what difference is it to the PGA of America? Well, for those of you who have a short memory, RBS agreed to be the first PGA of America “Official Patron,” referred to at the time as, “the highest level of partnership and designation ever granted by the world's largest working sports organization.”
At the time of the announcement, Allan Watt, RBS Head of Group Brand Communications said, "For over a century, RBS has been involved in the fabric of golf. We are now honored to support the work of The PGA of America. We are happy to join in their efforts in promoting PGA events, including the PGA Championship and the Ryder Cup, and the grassroots work of their 28,000 dedicated golf professionals."
That was then and this is now. Considering the US is now leading the charge regarding the moral oversight and protection of the banking sector, folks in the UK would be well advised to pay attention to another trend emerging in the land of the free and the brave.
Northern Trust Corp., which received $1.6 billion in funding through the Troubled Asset Relief Program, was harshly criticized by lawmakers for its corporate spending on clients and employees at the PGA Tour stop at Riviera. Its been reported that Wells Fargo, American International Group Inc. and Citigroup Inc. have canceled corporate events set for resort locations. Meanwhile, Democratic Senator John Kerry said he plans on filing legislation to ban companies from sponsoring “conferences” for years in which they receive bailout funds. Morgan Stanley, citing a tougher market and political environment, said it will not entertain clients and executives as part of a professional golf tournament it is sponsoring in June. That would be the tournament in Ohio that is affiliated with one Jack Nicklaus, who also happens to have a relationship with none other than RBS. You may recall they think so highly of the Golden Bear they created a 5-pound note with his image on it! Talk about a small world, which leads me back to the point those across the pond might want to pick up on.
The bottom line is Uncle Sam appears to be taking a dim view on bonuses, perks and other spending by banks that have become politically untenable, as the U.S. government is being counted on (heavily I might add) to revive the banking system. So the net effect here is that when making a deal with big brother, be it out of necessity, the receiving end of the transaction invites new transparency towards business practices, Whether its fair or not is irrelevant. The old saying still applies: Politics make for strange bedfellows. The folks at RBS would be well advised to recognize the new banking standards some are trying to invoke in the US when it comes to relationship building via golf. Remember, when making a deal with the devil, it goes without saying you’re the junior partner in it! The PGA of America will revert to this status too if the House of Commons attempts to follow the lead being set by those in Congress and the Senate.
YOU CAN’T WIN IF U DON’T PLAY: Callaway Golf (ELY: NYSE) began 2009 on a buying spree. The company reported the acquisition of uPlay, which it described as a “developer and marketer of technically superior consumer electronics devices.” But it didn’t reveal what price it paid for the business when it first announced the deal. That detail was shared with its shareholders, through the company’s annual report, which was published last week.
The estimated aggregate cost of uPlay was $11.2 million, which includes cash paid of $9.8 million, estimated transaction costs of approximately $0.2 million, and assumed liabilities of approximately $1.2 million.
In connection with this purchase, Callaway could be required to pay an additional purchase price not to exceed $10.0 million based on a percentage of earnings generated from the sale of uPlay products over a period of three years ending on December 31, 2011. However, to date, it appears UPlay’s sales have not generated any material affect to Callaway’s financial operations since it stated this as the reason for not restating its results of operations for fiscal years 2008, 2007 or 2006.
A FEW MORE TRICKS UP THEIR SLEEVE: Cleveland Golf/Srixon has added the Launcher Driver Ultralite Edition and Launcher Irons to tempt recreational players this coming season. According to the company, the new Ultralite Edition has a 30-gram lighter overall club weight and a 12-degree high-lofted head. It is equipped with an ultralite 40 gram Graphite Design shaft that is also an inch longer (46.5”) than the standard model. Incorporated is a Winn Grip, that weighs 38 gram) nearly as much as the shaft. The company is touting the product for players who have a swing speeds under 85 mph. The Launcher Driver Ultralite Edition will compete at the street price of $299 and begin shipping March 1, 2009.
The new Launcher Irons combo set consists of Launcher Hybrids in the longer irons (3, 4 and 5) and new Launcher Irons in the shorter irons (6-PW). According to the company, the hybrid design is 11% larger in the face versus previous Cleveland models.
The new irons have an oversized-face design, which provides 52% more Face-to-Center of Gravity Depth, according to Cleveland, compared to traditional irons. This is important, Cleveland said since it is a factor, which not only helps increase launch angles, but also increases ball speed and improves shot consistency on off-centered hits.
The Launcher Iron combo set (8 pieces) will carry a street price of $599 (steel) and $699 (graphite) and will begin shipping on April 1, 2009. As an introductory incentive, Cleveland Golf/Srixon is running a limited promotion offering consumers a free promo-stand bag with the purchase of any set of Launcher Irons.
PHIL’S FLOP! Fresh off his 35th victory on the PGA Tour, Phil Mickelson has a business proposition. After collecting his $1.1 million paycheck, Mickelson is offering recreational players a chance to learn some of the secrets to his success. “My ideas about the short game are very different from a lot of the instruction I see out there,” said Mickelson. “The goal here is help golfers build a foundation so that their practice time directly correlates to improved scoring on the golf course.”
The Arizona State alumnus has teamed with Emmy Award-winning producer/director Terry Jastrow to create Phil Mickelson: Secrets of the Short Game. The two-disc instructional set focuses on all shots played from 50 yards and in, will be available on DVD April 7 from CBS Home Entertainment and Paramount Home Entertainment.
Jastrow has produced other instructional tapes in golf with Jack Nicklaus, Arnold Palmer and others. “No great golfer has done an instructional program in more two decades. For years people have acknowledged Phil has a superior short game, but the question they still ask is, ‘How does he do it?’ Here Phil finally gives his answers.”
Mickelson has been outspoken on various topics throughout his career and it has landed him in some hot water at times. He doesn’t pull any punches with his thoughts on how recreational players can improve their short game techniques. On two popular chipping instructions, that “the club should go back and through the same distance” or that there should be “no wrist” in the swing, he said this: “If anybody teaches you one of those two methods, go somewhere else. There is one great way to chip and it is a method that I call ‘hinge and hold.’ There has never been a good chipper who does not conform to this technique.” On putting: “For years I have heard how you want your hands to oppose each other. I don’t buy into that either. We want our top hand turned stronger; this promotes a release.”
Phil Mickelson: Secrets of the Short Game includes sections on putting, chipping, sand shots and the flop shot Mickelson popularized soon after he joined the PGA Tour in 1992. The set has a run time of approximately two hours and retails for $49.95. It will be available online at www.philsdvd.com or www.philmickelson.com and in golf shops and retail stores everywhere beginning April 7.
MARKETING OUTSIDE THE BOX: One resort located outside the United States is looking to use another domestic venue to help tell its story. In a couple of weeks the PGA Tour will appear in the Miami metro area for the annual visit to Doral Resort and Spa. Home to the World Golf Championship --CA Championship hosted on the infamous Blue Monster golf course, its somewhat of an unlikely backdrop to The Roatan, a Honduras-based luxury golf resort.
"The international format of the World Golf Championships CA Championship and setting in multicultural metro area of Miami are perfect for introducing Pristine Bay Resort to golfers from around the world," stated Mario Toriello, Vice President of Sales and Marketing for Pristine Bay Resort. While golf fans will be intently focused on Tiger Woods and company, Pristine Bay Resort, home of The Black Pearl Golf Course designed by Perry and Pete Dye, has signed on to be one of the four largest sponsors of the event and thus tell its story.
Via its undisclosed investment as an "Alliance" sponsor, Pristine Bay Resort will introduce the multi-faceted project, which includes the golf course, five-star hotel, spa, deep-water marina, beach club, and a variety of residential products, to key markets in the U.S., Canada and subsequently around the world via television. Its an unusual and expensive strategy to employ network television to complement resort and golf course representatives who will provide detailed information about the project in Pristine Bay's Alliance Suite, located along the 419-yard, par-4 17th hole. The two architects, Pete Dye and son Perry will be among the featured VIP guests on hand to discuss the golf course among other amenities. The first two rounds will be televised by The Golf Channel and NBC will broadcast the final two rounds. The tournament will also be televised in over 200 countries. Located on the tropical island of Roatan, 35 miles off the coast of Honduras, Pristine Bay Resort is said to be situated on a 400+ acre site adjacent to the Caribbean Sea.
As you might have guessed, Pristine Bay Resort features a wide variety of residential products. Villas start at $600,000 and range up to $1 million, while lots begin at $230,000 and range up to $460,000. If it works, it will be a shrewd move. If it doesn’t, then it’s an expensive mistake.
LET’S MAKE A DEAL! Golf equipment sales have been known from time to time to use promotional tactics to stimulate interest and potentially sell through of products. Historically, these deals have surfaced in the dog days of summer as a means to get recreational golfers to dip into their wallets. On occasion they have appeared earlier on the calendar. But with it still being February and most of the country entertaining old man winter, its unusual to see the old buy one get one free promo. The culprit in this particular instance is Tour Edge. The Illinois based company is soliciting online buy one of its XLD-LS driver and get a FREE XLD fairway wood. Interested parties will need to take care of some paperwork and then submit both the receipt and form to the company for the gratis item.
While it isn’t a major brand that is initiating this promotional activity, it does beg the question of more will follow? After all there has been some history towards this herd mentality when it comes to the ultra competitive world of selling clubs. And that was before the economy went into the tank!
STOCK WATCH: The week began with more of the same on Wall Street. Consider it a derivative of a back to the future theme. The Dow Jones Industrial Average, which suffered a 485-point slide in the week before last, started out last Monday hitting new bear-market lows. The blue chip index ended down 250.89 points, or 3.4%, at 7,114.48, on the first trading day of the week representing its lowest closing mark since May 7, 1997. The S&P 500 dropped 26.72 points, or 3.5%, to 743.33, its lowest close since April 11, 1997. Its been said many times that its darkest before the dawn and on Tuesday stock prices received a lift from comments made by U.S. Federal Reserve Chairman Ben Bernanke. "If actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability -- and only if that is the case, in my view -- there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery," the Federal Chairman stated in his testimony to the Senate Banking Committee. He was delivering the Fed's semiannual report on monetary policy. Whether that becomes wishful thinking or reality, remains to be seen in the minds of many interested parties. For the time being the markets don’t seem interested in buying what the Fed Chairman was selling.
The Dow Jones industrial average closed the week down 302.74 points, or 4.1 percent, finishing at 7,062.93. The Standard & Poor's 500 index fell 34.96 points, or 4.5 percent, to close at 735.09. The Nasdaq composite index fell by 63.39 points, or 4.4 percent, closing at 1,377.84.
The Dow, at its lowest close since May 1, 1997, is now down 50.1 percent from its record high of 14,164.53 reached, believe it or not in October 2007. It came within 34 points of 7,000, last week, a level it hasn't fallen below in nearly 12 years, October 1997.
The Standard & Poor's 500 index breached its Nov. 21 trading low of 741.02, which came during the height of the credit crisis. Friday's finish was the lowest for the index since Dec. 18, 1996.
Wall Street also closed the books on the month of February. The Dow's 11.7 percent loss in the second month of the year was its worst since 1933, when it fell 15.6 percent. It also marks its sixth straight monthly decline. The half-year slide totals 38.8 percent, the worst since 1932, when it fell 45 percent.
The S&P 500 index fell 11 percent in February. It was the second-worst February for the index, topped only by an 18.4 percent slide in 1933.
WHEN WILL IT END? The International Air Transport Association (IATA) announced international scheduled traffic results for January showed a deepening year-on-year slump in demand. International passenger demand fell by 5.6% in January 2009 compared to the same month in 2008. It is also a full percentage point worse than the 4.6% year-on-year drop recorded in December. The January fall in demand is the fifth consecutive month of contraction.
The 5.6% drop outpaced capacity cuts of 2.0% driving the load factor to 72.8% - 2.8% below what was recorded for January 2008.
Meanwhile, the story isn’t any better for companies who use the friendly skies to transport products. The alarming collapse in cargo markets in December (-22.6%) worsened in January 2009 with a 23.2% year-on-year demand drop. It is the eighth consecutive month of contraction for freight traffic.
“Alarm bells are ringing everywhere. Every region’s carriers are reporting big drops in cargo. And, aside from the Middle East carriers, passenger demand is falling in all regions. The industry is in a global crisis and we have not yet seen the bottom,” stated Giovanni Bisignani, IATA’s Director General and CEO.
Asian carriers led the decline in passenger demand with an 8.4% year-on-year drop in January. While this is slightly better than the 9.7% contraction in December, it is positively skewed by the Chinese New Year, which fell at the end of January 2009 (and which was in February the year before). Capacity in the region contracted 4.3%. With Japan, the region’s largest market for air travel, expected to see its economy contract by an unprecedented 5% in 2009, the prospects for traffic in the region remain dismal.
North American carriers posted the second largest passenger decline at 6.2% led by a decline in Trans-Pacific travel. In response, carriers withdrew 2.6% of their international capacity, clawing back some of the expansion of 2008.
European carriers offset a 5.7% decline in demand with a 3.6% decrease in capacity. Demand decreased sharply from the 2.7% fall in December as European economies move into deep recession.
Latin American carriers saw a modest decline of 1.4%. Even against a 0.5% increase in capacity, the region turned in the highest load factors at 74.9%.
African carriers saw the demand decline slow from an average 4.0% in 2008 to 2.6% in January. The Middle East was the only region with a positive traffic growth of 3.1%. This is far below both the double-digit traffic growth in 2008 and the 10.8% expansion in capacity.
While many people might find zero reason to follow cargo numbers, consider it carries products which eventually are reflected into economic numbers that either show growth or declines to the countries throughout the globe. Not everyone chooses to fly product due to the costs associated but it offers an indicator on the segment. Remember, golf relies on China foundries for club heads and US shaft companies have taken up residence with a factory presence on the mainland too. They often prefer the slow boat from China mode, but it isn’t always the case.
Asia Pacific carriers, representing 43% of the market, led the cargo decline with a 28.1% year-on-year drop. European carriers were down 23.0%, while and North American carriers dropped 19.3%.
“The only good news is that fuel prices remain well below last year’s level. But the drop in demand is much more harmful. The industry is shrinking with revenues expected to fall by US$35 billion to US$500 billion, delivering a loss of US$2.5 billion this year,” said Bisignani.
“Airlines remain in intensive care, but while others ask for government bailouts, our demands on Governments are much more modest. First, don’t tax us to death in order to pay for investments in the banking industry. This includes the UK government’s plans to increase its multi-billion pound Air Passenger Duty and the Dutch Government’s misguided departure tax,” said Bisignani. In 2008, even as governments delivered tax breaks to stimulate economic growth, the airline industry absorbed an additional tax burden of US$6.9 billion.
“Second, give airlines the commercial freedoms that every other business takes for granted. With the world’s capital markets in disarray, archaic ownership restrictions are an unnecessary burden that must be lifted. Today’s crisis highlights the need to change the structure of this hyper-fragmented and fragile industry,” said Bisignani, referring to IATA’s Agenda for Freedom initiative.
Last Updated (Wednesday, 03 February 2010 10:17)
VOLUME 12, NUMBER 8
Web Street Golf Report
VOLUME 12, NUMBER 8
Monday, February 23, 2009
EAST MEETS WEST: The Asia Pacific Golf Confederation (APGC), the Masters Tournament, and The R&A announced the creation of the Asian Amateur Championship. The event is part of a partnership committed to promoting golf in the Asia-Pacific region. The Masters Tournament and The R&A will financially underwrite and provide support to the APGC in the running of the championship. In addition, the winner will receive an invitation to play in the 2010 Masters Tournament, and, together with the runner-up, will earn a place in International Final Qualifying for The 139th Open Championship at St Andrews.
“Golf continues to grow in this region and what better way to stimulate that growth than to enter into this groundbreaking agreement with the Masters and The R&A,” said Tommy Lee, Chairman of the Asia Pacific Golf Confederation. “This is an exciting partnership for golf in Asia-Pacific and the APGC is proud of its new affiliation. This initiative will help bring the game to new audiences in Asia-Pacific and will give aspiring amateur golfers a special opportunity in the game.”
Billy Payne, Chairman of the Masters Tournament, added, “We are extremely proud to announce that the winner of the Asian Amateur Championship will receive an invitation to compete in the Masters Tournament. This is an extension of the initiative we announced last April regarding the use of the Masters name, and reputation, to help grow the game of golf around the world.”
The R&A’s Chief Executive, Peter Dawson, remarked, “Throughout our 250-year history, The R&A has worked hard to act in the best interests of the game of golf. The potential to grow the game in Asia-Pacific is very large and the creation of this championship represents a wonderful opportunity to see the region’s talent flourish.”
The inaugural Asian Amateur Championship will be held at Mission Hills Golf Club’s World Cup Course from October 29 to November 1, 2009. In future years the event will be played in other countries affiliated to the Asia Pacific Golf Confederation, with the 2010 event scheduled to be played in Japan.
The APGC is the representative body for 32 national golf associations throughout Asia-Pacific, operating from its headquarters in Melbourne, Australia. There are approximately 18 million golfers and 4,000 golf courses in the region. The APGC’s missive is to assist member organizations in the development of golf in their respective countries, work to ensure adherence to the Rules of Golf as approved by The R&A, and partner with the International Golf Federation in the promotion of the game.
Dr. David Chu, Chairman of Mission Hills Group and founded Mission Hills in 1992, remarked,
"We're deeply honored to be the first host of the Asian Amateur Championship. This announcement marks a milestone in the history of international golf. Asia's best amateur golfer will now annually walk Augusta's hallowed fairways, building on the Masters' esteemed tradition of amateur involvement. The exemption is testament to Asia's golf awakening and is a golden opportunity to continue Mission Hills' leading role in growing the game globally."
IT’S IN THE BAG: Tiger Woods will be the center of the golf world’s attention this coming week when he makes his 2009 debut. A lot has changed since fans last saw Woods in action and suffice is to say, the world is a different place too. Reflecting in part these changing times, Woods who mutually ended his relationship with Buick, will have something new on his golf bag when he heads to the first tee at the Accenture Match Play event outside Tucson, AZ. “I will be carrying the AT&T bag. It's an extension of our preexisting relationship,” said the world’s #1 player. “They sponsor our tournament, our foundation, so it's been just a great partnership. Just continuing on that.”
ARE YOU GELIN’? It’s been anything but business as usual starting out 2009. A byproduct of these unprecedented times is that companies and individuals are forced to reevaluate many aspects of everyday life, at least as it was once known. Things that were once taken for granted, now come under closer scrutiny. Often it’s due to an economic motivation that initiates the process, but a byproduct is people are more susceptible to new ideas.
Big brands believe the equity they have enjoyed with consumers in the past can carry them forward (indefinitely) in the future. However, that may not always be the case. In these economic times, value is the new battleground. Golf as an industry has been comfortable with an assortment of vendors offering a wide variety of products in nearly every segment. While the playing conditions appear ripe for consolidation within the equipment segment, due to the global economy, it doesn’t necessarily guarantee that it can and will happen. At least not happen the way some people may envision. In the meantime, consumers will be inclined to consider alternatives that maybe might not have gotten their full attention before.
One company that is looking to continue its momentum is a small putter company. In 2007, a former CEO of Yes! Golf Asia Pacific and entrepreneur, Alec Pettigrew started a company and unveiled what independent studies indicated could represent a performance enhancement in putters. Pettigrew’s Groove Equipment Limited (GEL) putters feature horizontal grooves milled onto a much softer aluminum insert. The purpose of this design feature is that it starts the ball rolling faster and therefore straighter.
“In general, a putt is more susceptible to stray off-target during the skid, while a rolling putt will hold its intended line and improve the chances of going in the hole,” said Alec Pettigrew Managing Director of Groove Equipment Ltd. (GEL). “Additionally, because the ball comes off the face straighter and with more forward roll it is easier to control distance, one of the leading factors in three-putting.”
GEL partnered with Dr. Paul Hurrion, who specializes in biomechanical analysis using high-speed cameras, force platforms and computers. He is contracted to UK Athletics, the International Cricket Council (ICC), English Cricket Board, and British Diving. His work also extends beyond this, as luck would have it to golf. His passion for golf has led to assisting European Tour Professionals and holding PGA-accredited Putting Clinics. Suffice is to say that his thoughts and ideas have experienced a major impact in a relatively short time. For example, upon his victory of the 2007 British Open, Padraig Harrington thanked Hurrion for his work behind the scenes with his putting game.
In early 2008, GEL Golf announced the launch of its ‘Paul Hurrion Signature Range’ at the PGA Show in Orlando. The line incorporated the company’s groove technology and an innovative approach to weight disbursement. A True Temper Dynamic Gold S400 shaft rather than a standard putter shaft was incorporated, the company said. GEL’s groove and multi-layer aluminum insert technology-enabled weight to be positioned around the perimeter of the putter head, creating a high moment of inertia (MOI) for a truer roll, it said.
By October of 2008, GEL Golf proclaimed it was the number one groove putter on the Asian Tour. At the Indian Open in New Delhi, which finished on October 12, 2008, a total of 21 players had GEL putters in their bags, the company reported ahead of groove putter rival YES!, who had 16 players in the field using their putters. While at the Omega Championship, the season-ending Tour Championship on the China Tour, GEL putters were in play with 27 players, over 25% of the field, it said. Considering the age of the company the accomplishment while modest to more established brands was remarkable for it.
In 2009, GEL is looking to extend its groove by expanding its product offerings. “Based on the success of the inaugural GEL ‘Paul Hurrion Signature Range’, I have designed four new models to help golfers continue to enjoy the key benefits Tour players look for on the greens,” said Dr. Paul Hurrion. “A putter designed with horizontal grooves to impart forward roll, peripheral-weighting that maximizes the sweet spot across the putter face and heel-toe weighting to increase the MOI for improved resistance to twisting on off-center hits. This creates stability at impact in the area of the game that matters most,” he added.
The ORA (Edge) features a modified alignment, face-balanced blade with an inline weighting, GEL said. It has a ‘crank-neck’ hosel and full shaft offset. Weight alignment arms create unique weight distribution within the putter face, according to the company.
The PONDERA – (Balance / Equilibrium) is a heel-toe, weighted mallet with a ‘crank-neck’ hosel and full shaft offset. It has a single alignment system that squares the putter face to help focus the putter to the target.
Rounding out the new foursome are the VICIS – (Time) and QUASSO – (Break). Both are heel-toe, weighted modified blade models with a ‘crank-neck’ hosel and full shaft offset. The ‘Paul Hurrion Signature Range’ is available with an MSRP of $299.
At this point in time, everyone in the world is feeling the impact of the global economy and change is something many are hoping for. GEL is hoping those avid golfers who are thinking of changing putters in 2009 will think of it as an alternative choice to possibly making a few more putts in the future.
WANT A NEW LOOK? YES! Golf thinks there is a market for interchangeable hosels in putters. The company is the first to introduce two putters, Tracy III Plus and Lizzy Plus, with a screw in system. The interchangeable hosel putters are precision CNC milled and can accommodate one of four hosel options, YES said, designed to improve the look and dynamic balance of the putter.
"By combining C-Groove technology and the interchangeable hosel technology you have the most advance putter in the industry," said Francis Ricci, president of YES! Golf. "The concept was developed in direct response to requests from our tour players. Putters are such a personal preference for golfers and by giving them hosel options, golfers can truly customize their putter and maximize their results by selecting the look and style of the putter that best suits them."
The Tracy III Plus head has a single sight alignment line in the cavity of the putter head. It also has a loft of 2.5 degrees (2 degrees flat or upright available) and lie of 72 degrees with length options of 32-37 inches. It is available March 15 in right hand only at a suggested retail of $360.
The Lizzy Plus is a mallet-style putter head and also features a single sight alignment in the back cavity. The putter has a loft of 2.5 degrees with length options of 32-37 inches. It is available also March 15 in right hand only, at a suggested retail of $360.
A plumber neck hosel is standard in the Tracy III Plus and the Lizzy Plus. Three other hosel options are sold separately - slant neck, z-bend and a pronounced heel-toe hang. The suggested retail for each hosel option is $100, which includes in the price the wrench needed to remove and install the hosel.
WHAT’S IT GOING TO COST? Tour Edge is responding to the economic times with some aggressive pricing. The company is offering its 460cc, high-tech, 6A4V titanium QLS driver, which features a slight offset for $149. The matching QLS fairway woods made from stainless steel that promise exceptional forgiveness and greater playability from tight lies due to a sloped crown and eliminated skirt are going for $119. The hybrids in the QLS family are available at $99. Tour Edge also has a large undercut cavity and super-wide sole design in its QLS irons starting at $299 for 3-PW steel shaft. The clubs are available from its network of local Tour Edge dealers.
UNITED WE STAND DIVIDED WE FALL: The economy is forcing companies and consumers to rethink many things. How to make a dollar go farther is a central theme in either camp as the economy struggles to regain its prior form. One golf company is tackling the challenges of today by presenting the best of both worlds.
Sun Mountain’s new Four 5 golf bag combines the popular individual club divider system with a lightweight stand bag. Conventional wisdom suggests that golfers have to choose either lightweight or individual club dividers. The designers at Sun Mountain believe they have put that myth to rest by combining the organization of individual club dividers with the carrying ease of a lightweight 4.5 pound stand bag. Four 5 is available now at a full-suggested retail price of $219.
I BALL: Callaway Golf (ELY: NYSE) has created its most technologically advanced ball it said it has ever developed. A tungsten-infused outer core promises to shift weight away from the center of the ball, which Callaway said would reduce spin off of a driver. A thermoset urethane cover provides increase spin on short shots, Callaway said, while it’s trademark Hex Aerodynamic surface reduce drag and promotes a stable ball flight.
“The Tour i Series products embody all of our best golf ball technologies: an ultra-thin yet consistent reaction-injection molded (RIM) urethane cover, a four-piece construction with a dual-core and Hex Aerodynamics,” said Steve Ogg, VP Golf Ball Research and Development, Callaway Golf. The new product introduction carries a retail price of $45.99 per dozen ($11.50 per sleeve).
THE DEVIL IS IN THE DETAILS: Callaway has also introduced the Big Bertha Diablo golf ball, which claims has a breakthrough design that has yielded unparalleled performance within the soft two-piece golf ball category. A soft yet ultra-resilient core, Callaway described combined with a softer ionomer cover promises remarkable distance, soft feel and stealthy control around the greens. Callaway’s proprietary Hex Aerodynamics provides optimized seamless design to reduce drag and promote stable ball flight.
“The Big Bertha Diablo golf ball redefines the soft two-piece golf ball category. With its high ball speed, low driver spin, and the lowest ball compression in the market, Big Bertha Diablo is dramatically different than any other two-piece golf ball,” said Steve Ogg, VP Golf Ball Research and Development, Callaway Golf. Dancing with the devil carries a retail price of $23.99 per dozen ($6.00 per sleeve).
NOT DONE YET: Callaway’s HX Hot Plus is considered the longest three-piece golf ball, according to the company and “pushes the boundaries of speed allowed under the rules of golf.” A new high-speed core features a proprietary rubber formulation, Callaway said, that increases ball velocity across a wide range of swing speeds. A new speed layer between the core and ionomer cover is said to increase the ball speed. “HX Hot Plus takes a good thing and makes it better. The new softer, but very resilient core, coupled with a softer and thinner cover, improves the feel of the ball without sacrificing distance. HX Hot Plus has exceptional ball speed, low driver spin and a softer feel,” said Ogg. The HX Hot Plus retails for $27.99 per dozen ($7.00 per sleeve).
HAPPY TRAILS: After 13 years, Virginia Bunte has resigned as Senior Vice President and Chief Financial Officer of Golfsmith International (GOLF: NASDAQ). It is effective March 3, 2009. In a company press release, Golfsmith said her departure was not a result of any disagreement with the Company over any of its policies, practices or financial reporting. “I want to thank Ginger for her hard work and dedication over the last 13 years that she has been with Golfsmith. We all wish her the very best in her future endeavors," stated Marty Hanaka, chairman and chief executive officer of Golfsmith.
DOUBLE TROUBLE: The economy is the likely culprit for one golf business that is beginning to show signs of cracking. Sport-Haley, Inc. (SPOR: NASDAQ) reported second quarter sales ($3.23 million) that were 26% lower than a year ago. The drop represented $1.16 million in lost sales and a bottom line that bled $142,000 from its operations.
Over six months, Sport-Haley said it had sales of $6 million, a fall off of $1.75 million or 22% from the previous year. The bottom line for the apparel company at the midway point of its fiscal year was in the hole to the tune of $1.18 million. The blood letting has grown by $490,000 or 71% in a year, compared with the net loss of $692,000 for the six months ended December 31, 2007.
STOCK WATCH: Financial markets gave a resounding thumb down to the economic stimulus package and the ongoing government intervention towards stemming the tide of foreclosures in the United States. It would appear that Wall Street has been sinking lower and lower since the optimism, which fed a late-2008 rally, was clearly unfounded. For the time being, it is equally apparent that no one can figure out when the recession will end. It turned out to be a triple six-week!
The Dow fell another 6.2 percent for the week. It was its worst performance since the week of Oct. 10, when it lost a staggering 18.2 percent. For trivial buffs or historians, the Dow was off almost 220 points at its intraday trough on Friday, which put it slightly below its closing low set in October 2002 after the infamous Internet bubble burst. The S&P fell 6.9 percent, while the Nasdaq lost 6.1 percent.
The market concerns are the reality of a protracted recession and likelihood that massive government intervention programs can do little to bring the domestic economy out of its tailspin. This line of thinking appears to have essentially forced some investors towards abandoning stocks, particularly those of struggling financial companies.
ARE YOU UP FORE THE CHALLENGE? There was a time when sports offered a welcome diversion to the harsh realities of life. Today, it seems the only news is bad news within the sports world. Maybe Tiger will help to change that in a small way this coming week... But for those who prefer to take matters into their own hands consider one venue is a willing partner in the notion that there is, “no such thing as too much golf.”
The Omni Bedford Springs Resort is offering an encore presentation this spring of its Unlimited Golf Package is available Mondays through Thursdays. The package combines luxury accommodations with as many holes as the guest can play in a day on the historic, award-winning Bedford Springs Old Course.
Ranked by Golfweek magazine as one of the leading classic courses available for public play, the Old Course has evolved from the original contributions by three forefathers of American golf course design: Spencer Oldham (1895), A.W. Tillinghast (1912) and Donald Ross (1923). Select golf holes at Bedford Springs are thought to be among the first built in the US. Also named as the “Renovation of the Year” for 2007 by Golf Inc. magazine, the course stretches across the Allegheny Mountains along Shobers Run Creek, weaving amid 200-year-old oaks, serene meadows and picturesque marshes.
“The challenge of the Bedford Springs Old Course is that it takes you back in time…instead of looking at history, you are in it,” says Ron Leporati, head golf professional at the Omni Bedford Springs Resort. “It is a tough test of golf and definitely must be played several times to be fully experienced and appreciated. That’s why this package has been so popular!”
Rates for this “golf fanatic’s dream-come-true” start at $288 per person per night from April 1 through May 21; $308 from May 22 through October 31; and $258 from November 1 to November 12. Packages are subject to availability and for a minimum of two guests.
The historic, circa 1796 resort reopened in 2007 after a $120-million renovation and expansion and became part of the Omni Hotels portfolio at the beginning of this year. Located within a short drive from Washington, DC and Pittsburgh, the resort sits on 2,200 acres in the Allegheny foothills of south central Pennsylvania and has played host to 11 U.S. presidents. It was once considered the “Summer White House” of James Buchanan.
GET OUT! Among its many descriptions, North Carolina’s Outer Banks has been called, “The land of beginnings.” From England’s first attempt to colonize the Americas, to the Wright Brothers’ role in helping transport mankind into the age of aviation, the Outer Banks have stood as an important chapter in the history book of modern civilization.
Along with tranquil beaches, luxurious accommodations and exhilarating recreational activities, these sandy barrier islands also boast seven championship golf courses that make the Outer Banks a perfect place to escape for a spring golf getaway.
Outer Banks Golf Travel has announced a special spring package through May 31, 2009, which includes three days of golf on three of its championship courses — Kilmarlic Golf Club, Sea Scape Golf Links and The Carolina Club — along with two nights lodging at either the Ramada Inn Oceanfront ($235 per person) or the Hilton Garden Inn ($284 per person).
Prices are good through May 31, 2009, are all-inclusive, based on double occupancy, good weekdays (Monday-Thursday only), and include 18 holes plus cart at each course.
Host site of the 2004 and 2009 North Carolina Opens, Kilmarlic Golf Club is nestled among 605 acres of maritime forest and sprawling wetlands. The Tom Steele design meanders through canopies of giant oak, pine and dogwood that exemplify the natural beauty of North Carolina’s Outer Banks.
Former Masters champion Art Wall designed Sea Scape Golf Links in true Scottish links style. Located one block from the ocean in beautiful Kitty Hawk, the course employs the windswept sand dunes and maritime forest. Dramatic elevation changes offer ocean views from several of the beautiful holes — a unique coastal environment that played host to the 2000 North Carolina Open.
Often considered the “locals’ choice” for great golf on the Outer Banks is The Carolina Club, which features bent grass greens and a picturesque par-3 island green. Three memorable golf courses, world-class accommodations and a history lesson await. To book this package and or request more information, visit OBXGolfTravel.com or call 252-491-5460.
LONDON CALLING! Anyone looking for a pass, this just might change your mind. Rather that travel the easier route by standing pat, VisitBritain is encouraging those who are prepared to travel during this challenging economic times. The national tourist office for England, Scotland and Wales has unveiled its Winter Warmer package, which offers travelers exceptional savings during a London vacation.
The travel promotion includes a two-day London Pass, one London Eye (the giant 800-passenger, 443-feet high observation wheel overlooking London and 25 miles in all directions) ticket and one £10 Oyster Card (public transport debit card) for the affordable price of $99, a 19 percent or $22.50 savings, simply by using the discount code winter. The travel package must be redeemed on or before March 31, 2009 by visiting www.visitbritain.com/onlineshop.
"With the pound at a 23 year low against the dollar, 2009 is absolutely the year for Americans to visit Britain," said Simon Bradley, executive vice president, VisitBritain for the Americas. "The winter season is an excellent time for budget conscious travelers to reap even more exceptional savings on airfare and hotel accommodations in Britain. Our latest travel special is an economical way to visit more than 50 popular London attractions, as well as save money on meals and theater productions."
The London Pass is one element of the Winter Warmer package providing free admission to major London attractions such as The Churchill Museum and Cabinet War Rooms, Hampton Court, Kensington Palace and the Orangery, St. Paul's Cathedral, Shakespeare's Globe Theatre, Tower of London and Windsor Castle. Be sure to say hello to the Queen if she is in when you’re there! The package also provides travelers with a 15 percent to 25 percent discount on afternoon tea and dinners, as well as preferential rates on excursions offered by Bateaux London - Restaurant Cruise, Evan Evans Tours, French Brothers Cruise - Windsor, and The Original London Walks among others. Discounts on theater shows, shopping and currency exchange bureaus are also available with the London Pass.
VisitBritain's online shop is also a one-stop shop resource for every Britain-bound traveler. Rail and subway tickets, attraction passes, maps and even the Tower of London and London Eye tickets can be purchased in advance, online in dollars, avoiding the hassle of waiting in line on arrival: www.visitbritain.com/onlineshop.
Last Updated (Wednesday, 27 January 2010 10:41)