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Arnold Palmer has teamed up with venture capitalist Peter Nanula and the Hicks-Muse real estate opportunity to fund a $200M real estate investment trust (REIT) comprising of more than 20 golf courses around the U.S., according to Peter Slatin of the N.Y. POST. For Palmer, a REIT is a "tax-effective way of lumping real estate assets -- such as golf courses -- into a single corporate entity." Nanula and Palmer's objective is "to create the first true branded golf courses, using the model of brand-name hotels like Marriott." The REIT will be "launched this spring by Smith Barney" and "is expected" to go public one day. Sources "close to the company" say the REIT "will lease its courses back to their current operators." At "about" 10 of the courses, Palmer's firm is already manager (N.Y. POST, 3/5).
Despite slipping retail sales in snow-sports products nationwide last year, "it was snowboarding that heated up sales, while ski sales ... chilled," according to Penny Parker of the DENVER POST. Gart Sports CEO Doug Morton: "Snowboarding is where the business is going." Morton said the fact that "alpine ski heavy-hitters" such as Rossignol, Salomon and K2 have "leaped into snowboard manufacturing is a clear signal of a market shift." Snowboards and snowboard accessories accounted for 60% of all downhill equipment sales at Gart Sports last year, and snowboards were 40% of all hard goods sold chainwide. According to the Skiing Industry Association retail audit from August through December '97, total snow sport product sales dropped 4.7% -- to $1.28B from $1.34B compared to the same period in '96 (Penny Parker, DENVER POST, 3/5). CONSOLIDATE, MAN: SPORTSTYLE's Beth Howard examines consolidation within the snowboard industry. Arbor Snowboards President Bob Carlson said that the 350 companies that were manufacturing snowboard products have been reduced to 100, and "in two years, there will be no more than 40 viable companies producing snowboarding goods." Carlson: "The industry grew so fast and manufacturers expected continued growth. Even though the industry is still growing about [25%] a year, there are more manufacturers than the market can handle" (SPORTSTYLE, 3/98 issue).