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Home TOUGH MAKING MONEY IN 2009:

Once upon a time, the big three were Arnie, Jack and Gary. Now it seems as if its just Tiger and then everyone else. Today, in the golf industry in its Acushnet, TaylorMade and Callaway going off of revenue bases. While Arnie, Jack and Gary made many contributions to the game throughout their careers, time eventually caught up to each of them.
Time is a curious thing as it can seduce you to relax in the moment and yet pass you by with its speed. 2009 hasn’t been the best of times for many industries and certainly golf is included in that. While the year began with more questions than answers, it was largely unknown how much of a bite the economy would take out of golf. For the sake of the equipment business, its been a trying time. Not in the products that were introduced or the performance attributes they boast, but in the adoption by consumers at retail even with a deal or two thrown in.
Looking at the big three equipment makers, sales are down across the board. Acushnet is lagging 2008 revenues by $165.3 million, while Callaway has dropped by $181 million. TaylorMade, without the inclusion of Ashworth, which it acquired at the end of last year, is trailing 2008 by €26 million going into the fourth quarter of the year. There had been some discussion that in difficult times, consumers who were in the mood to spend, would revert to larger brands. “The consequence is that whatever inventory dollars the trade does in fact go out there with, will be concentrated against the much larger brands. We're clearly going to be a beneficiary of that, and I think that will to a large extent offset any inventory resistance that might exist. So in the short term, I think we're somewhat insulated from some of the inventory questions. In the long term it actually ends up being beneficial, if in fact a lot of secondary brands are consolidated out of stores,” Callaway Golf, President and CEO, George Fellows told Wall Street analysts on October 30, 2008. The proof is in the pudding as they say, and the reality is it never happened.
Most importantly two out of the big three will lose money from their operations in 2009. What does that say about the rest of the playing field? Acushent, by virtue of its stranglehold in the golf ball market and its three brand strategy (Titleist, FootJoy and Cobra Golf) may be the only business that can lay claim to making money even though its expected the fourth quarter will generate a loss. 
By in large, 2009 is already spoken for with less than 60 days of life left in it. The next real challenge is 2010 and trying to reverse the potential trend if the economy is indifferent and consumer spending, especially in the discretionary category, doesn’t pick up. The playing conditions may improve but its far too early to tell or forecast that the economy will turn to a friend from being foe.