Callaway Golf will use a network of nearly 300 authorized dealers in the USA to offer its complete line of Callaway and Odyssey branded products to consumers online through a new website called shop.callawaygolf.com. An automatic algorithmic selection mechanism will place the consumer directly in contact with the retailer that can fulfill the order based on factors such as geographic proximity and inventory availability.
As warned previously, Callaway suffered a poor 3rd quarter, posting a higher net loss of $11,916,000 against the year-ago loss of $4,804,000, as sales fell by 12.2 percent to $193.8 million for the period. Sales declined by 13.3 percent to $103.2 million in the USA and by 10.8 percent to $90.6 million in the rest of the world, but apparently for different reasons besides a lack of major new product introduction.
In Europe, sales were down by as much as 20 percent, partly because the World Cup of football drove golf players away from the greens at the beginning of July. In Japan, on the other hand, many consumers have been waiting for the new regulations on the drivers that they can use from 2008 onwards. According to the management, however, Callaway’s brands are gaining market shares in both regions.
The management firmly intends to refocus its Top Flite and Ben Hogan brands. Top Flite will liquidate inventories of high-priced balls that did not sell and launch a cheaper line in January, called D2, and Ben Hogan will become again more of a niche brand.
The lack of new product introduction caused the company to lose about $30 million in sales during the latest quarter. It’s making up for it in part with the launch later this month of a new line of advanced stainless steel drivers called X Hybrids. A new series of initiatives is expected to generate further savings of $50-60 million in the next two years, including a saving of $20-25 million in 2007.