SBJ/August 31 - September 6, 1998/No Topic Name

Callaway thinks small to get well

For the Callaway Golf Co., bigger may no longer be better.

Callaway, the Carlsbad, Calif.-based company that revolutionized the golf club business with its hugely successful Big Bertha line of metal woods, is introducing a new line of metal clubs it hopes will reverse its financial slide while satisfying the U.S. Golf Association's growing concerns about advances in club technology.

Callaway's new line of drivers and fairway woods features a smaller club head made of stainless steel. The debut of the clubs represents a sharp departure for the company, which made its reputation — and considerable profit — by making big-headed drivers from alloys such as titanium.

But after watching its net income for the six months ended June 30 plummet 55 percent to $32 million, and net sales fall 3 percent to $410 million, Callaway decided to replace its War Bird club line — which predates the Big Bertha — with the new Steelhead line.

Richard Helmstetter, Callaway's senior vice president and chief of new products, said the line is aimed at the average golfer. The metal woods are priced at $195 each for steel shafts and $295 for graphite shafts.

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