New Callaway President Brewer Seeks To Stop Company's Sliding Market Value
Callaway President & CEO Chip Brewer is focused on “cutting costs, selling assets and trying to put Callaway’s playing equipment back at the forefront of consumer’s minds,” according to Sam Mamudi of MARKETWATCH. Brewer has a goal “to reverse the long slide of the company.” Data from FactSet Research shows the company has a market value of about $360M, compared to its high at $2.3B in '97. One of Brewer's first acts “was shedding a business unit," selling the Top-Flite brand to Dick’s Sporting Goods in early April. That was the “second asset sale this year” as Callaway “sold its Ben Hogan brand" to Perry Ellis Int'l in February. Callaway also “has laid off 7% of its staff” since June. The company last month “settled a costly six-year patent lawsuit with Acushnet Co., which owns the Titleist brand, stopping another drain on costs.” Brewer said, “There’s not a problem with our product performance, it’s our market appeal. We need to improve the sex appeal of the products ... with a crisper marketing message and more aggressive presentation.” Mamudi noted among the initiatives is “allowing consumers to personalize their Callaway clubs, choosing their own colors for grips and shafts and even having their initials stamped on the club’s head.” While marketing plans are still being developed, Brewer said that “one element will be to add more golfers to the company’s stable of endorsers.” He added, “Sales success is perfectly correlated to strong PGA Tour position.” Phil Mickelson is currently Callaway’s highest-profile endorser, Gilford Securities Dir of Equity Research Casey Alexander said they "have to get younger," because Mickelson, Arnold Palmer and Gary Player "aren’t going to do it” (MARKETWATCH.com, 5/21).