NEWS FLASH - Titleist/FootJoy To Be Sold Or Spun Off!

[MmmmmmBuddy]

Wow....FB selling off both or either of them is....well....wow...just wow.

 

 

I find it interesting that Fortune Brands is looking to offload so much here all of a sudden.

It is my understanding that Titleist has been for sale for a number of YEARS. The timing of these deals is suspect, but the business world is a mess right now. From my small part of the golf business world, more conglomeration is a terrible thing. It forces the retailer to do business in a manner that the vendor dictates, not the other way around. more of a push system than a pull system. We are almost there now. Companies are dictating retail pricing and product flow to the market, not the market deciding what the true price of a new Taylor Made driver should be.

 

 

 

Sorry. Rant Over.

[GolfSpy Dave]

It is my understanding that Titleist has been for sale for a number of YEARS. The timing of these deals is suspect, but the business world is a mess right now. From my small part of the golf business world, more conglomeration is a terrible thing. It forces the retailer to do business in a manner that the vendor dictates, not the other way around. more of a push system than a pull system. We are almost there now. Companies are dictating retail pricing and product flow to the market, not the market deciding what the true price of a new Taylor Made driver should be.

 

 

 

Sorry. Rant Over.

Do you think that this will lead to more margin control like Ping's. Even the older models are still expensive. My understanding is that Ping says price it like this, or no Ping. Could the multi headed company push stores into carrying all parts of the line-up, Shoes, clubs (of all quality levels) and etc under threat of no product?

Bit early for that much gloom and doom, but you are in a larger shop. You see more than I do.

[Matt Saternus]

It is my understanding that Titleist has been for sale for a number of YEARS. The timing of these deals is suspect, but the business world is a mess right now. From my small part of the golf business world, more conglomeration is a terrible thing. It forces the retailer to do business in a manner that the vendor dictates, not the other way around. more of a push system than a pull system. We are almost there now. Companies are dictating retail pricing and product flow to the market, not the market deciding what the true price of a new Taylor Made driver should be.

 

 

 

Sorry. Rant Over.

 

 

As someone not involved in the golf business, but very interested in it, I appreciate your comments and would be interested to hear you talk more on this issue. Particularly, I am curious about your comment:

 

"Companies are dictating retail pricing and product flow to the market, not the market deciding what the true price of a new Taylor Made driver should be. "

 

Can you explain this a bit more? I understand the ways in which companies like TM can dictate pricing, but why/how is the markets voice drowned out? When you refer to "letting the market decide," is that more in reference to the end user or the store owner or both?

[Viper12]

I haven't read thru all the posts in this thread, but I have to wonder about titleist selling the Cameron name. My educated guess is that they own the name but don't own the man. He may be under contract but I wouldn't be surprised if he could go out on his own under a different brand name if push came to shove. I believe similar things have happened in the past with putter designers.

[MmmmmmBuddy]

 

 

Can you explain this a bit more? I understand the ways in which companies like TM can dictate pricing, but why/how is the markets voice drowned out? When you refer to "letting the market decide," is that more in reference to the end user or the store owner or both?

I am not an Econ expert by any stretch of the imagination, but here is my .02

When Manufacturer X releases a golf club, they dictate the retail price to the golf stores, under the threat of closing the store's account if the store does not abide by the pricing requirement. The club has an artificially inflated value, not subject to the supply/demand forces that take place in other markets. The consumer is forced to pay Company X's price for the club, until Company X decides to release another "better" club, and liquidates the remaining inventory on the market at a deflated price. The retailer is constantly fighting an "inventory battle" to keep just the right mix on hand. If a retailer has too many of a certain club left at the end of a cycle, because the club was priced too high initially, He is stuck tying to recoup his losses at a much later date, when discounted clubs have already hit the market.

Like I said, I am NOT an Expert. I just have opinions.

[krevo]

LOL

 

This is huge news. Honestly though, I could care less. No matter who he goes with, he'll be able to roll out his "Fine Milled Putters" under another corporate conglomerate's name without any problems.

 

And all the putters in the closet might give me more spending money.

 

 

Win/win I suppose.

[putterplating]

 

 

Blues and Oil cans are exactly where to start. already nice because only an oil can can be refinished in the studio shop in oil can.

 

 

I know of at least one other place that offers the oil finish.

 

If a split happened, Cameron would do very well on his own.

[GolfBagCheck.com]

I find it interesting that Fortune Brands is looking to offload so much here all of a sudden. Obviously, the economy is affecting them in some manner or I wouldn't think they would be looking to break up Cameron and Titleist. I'd be interested to see how this pans out when it is all said and done.

 

For a huge corporation like Fortune Brands, it is all about driving growth and shareholder value. Although Titleist is a great company, they are in a non-growth industry. Titleist has done a tremendous job staying profitable and keeping market share, but in the big picture there is not much room for growth since golf is declining, not growing these days. That is why Titleist would be better off as a stand alone business rather than part of a conglomeration. Fortune Brands also owns Jim Bean, Moen, etc... much larger industries than golf.

[Addicted2Golf]

I'd imagine one area Cameron has benefited from his association with Titleist is on the manufacturing side. If he goes on his own, then would he release less product every year?

[Matt Saternus]

I am not an Econ expert by any stretch of the imagination, but here is my .02

When Manufacturer X releases a golf club, they dictate the retail price to the golf stores, under the threat of closing the store's account if the store does not abide by the pricing requirement. The club has an artificially inflated value, not subject to the supply/demand forces that take place in other markets. The consumer is forced to pay Company X's price for the club, until Company X decides to release another "better" club, and liquidates the remaining inventory on the market at a deflated price. The retailer is constantly fighting an "inventory battle" to keep just the right mix on hand. If a retailer has too many of a certain club left at the end of a cycle, because the club was priced too high initially, He is stuck tying to recoup his losses at a much later date, when discounted clubs have already hit the market.

Like I said, I am NOT an Expert. I just have opinions.

 

Thanks, I appreciate getting your views on this. I definitely see how stores are getting stuck. My thought is that the customer still has the ability to say "$300 is too much for a driver," but I guess they don't.

 

I'd imagine one area Cameron has benefited from his association with Titleist is on the manufacturing side. If he goes on his own, then would he release less product every year?

 

That's a big part of the speculation going on here: will he tie in with a new OEM and continue to do OTRs or just be a boutique guy. My money is on getting with another OEM, IF he splits from Titleist.

[Tony Covey MGS]

My guess if this actually happens, Scotty follows the money - and the trail leads right to Nike. Boutique putters are nice, but I'd be willing to bet if you compared Bettinardi sales from before he was with Hogan to his time with Hogan and Mizuno, and now out on his own; my guess the numbers would show it pays to have a name brand backing you up. Even with the cult like following, Scotty would be wise to move with the brand.

 

I don't know what the retail numbers actually are, but anecdotally, apart from the Cult of Cameron, the majority of brandwashed individuals I know worship at the temple of swoosh. In my estimation this would be the singles biggest merger of evil forces since Darth Vadar joined the dark side.

[SunsetBeachCustomPutters]

My guess if this actually happens, Scotty follows the money - and the trail leads right to Nike. Boutique putters are nice, but I'd be willing to bet if you compared Bettinardi sales from before he was with Hogan to his time with Hogan and Mizuno, and now out on his own; my guess the numbers would show it pays to have a name brand backing you up. Even with the cult like following, Scotty would be wise to move with the brand.

 

I don't know what the retail numbers actually are, but anecdotally, apart from the Cult of Cameron, the majority of brandwashed individuals I know worship at the temple of swoosh. In my estimation this would be the singles biggest merger of evil forces since Darth Vadar joined the dark side.

 

 

Nike makes everything in China except for a few items for tour players that are done at the Oven. This is why Nike and Bettinardi never went anywhere before he went to Mizuno.

 

Do you really think Scotty wants his putters made overseas again after the Pro Platinum debacle? Of course he may not have any say in the matter depending upon how his contract with Titleist is written.

[SunsetBeachCustomPutters]

My guess if this actually happens, Scotty follows the money - and the trail leads right to Nike. Boutique putters are nice, but I'd be willing to bet if you compared Bettinardi sales from before he was with Hogan to his time with Hogan and Mizuno, and now out on his own; my guess the numbers would show it pays to have a name brand backing you up. Even with the cult like following, Scotty would be wise to move with the brand.

 

I don't know what the retail numbers actually are, but anecdotally, apart from the Cult of Cameron, the majority of brandwashed individuals I know worship at the temple of swoosh. In my estimation this would be the singles biggest merger of evil forces since Darth Vadar joined the dark side.

 

Very true. It was easy for Bettinardi to leave or split with Mizuno. From what I am told the majority of his money(even when he was with Mizuno/Hogan) is made through government contracts. He mills some stuff that when you visit him you are not allowed to see.

 

Scotty does not have this luxury, he does not have any in house big time CNC mills needed for a production run of putters.

[Pert1862]

This is a scary sign of the times that a name like scotty cameron would be up for any kind of sale given his reputation. That being said I can see nike scooping him up and furthering the brand and really pushing the new partnership via media. An earlier post said it best, nike dosent have a putter guy in their stable. This would def round out their offerings as all top notch. I look forward to hearing the final verdict on all of this.

[GolfSpy Dave]

Very true. It was easy for Bettinardi to leave or split with Mizuno. From what I am told the majority of his money(even when he was with Mizuno/Hogan) is made through government contracts. He mills some stuff that when you visit him you are not allowed to see.

 

Scotty does not have this luxury, he does not have any in house big time CNC mills needed for a production run of putters.

And that lack of milling machinery is probably the best point of this thread. That would be a huge cost for him to keep production levels at the current ones if he went on his own. I don't think that the Scotty brand would work as just a small boutique after having the big time gig with titleist.

 

More interesting is the idea of Betti milling top secret stuff. Imagine he ships the wrong box to a customer.

[GolfSpy_X]

Remember this has less to do with Scotty and Titleist and more with Fortune Brands the company that owns them. It is all about the stock price.

 

 

This is a scary sign of the times that a name like scotty cameron would be up for any kind of sale given his reputation. That being said I can see nike scooping him up and furthering the brand and really pushing the new partnership via media. An earlier post said it best, nike dosent have a putter guy in their stable. This would def round out their offerings as all top notch. I look forward to hearing the final verdict on all of this.

[GolfSpy Dave]

Remember this has less to do with Scotty and Titleist and more with Fortune Brands the company that owns them. It is all about the stock price.

For FB, Titleist and Cameron are just a line on a spreadsheet?

What other brands do they own that I would recognize?

[Tony Covey MGS]

I took a quick look at the fortune brands website. The names that jump out at me are Moen, MasterLock, Jim Beam, Suaza, Maker's Mark, and El Tesoro. They apparently are also responsible for some sort of spirit called "Cockburn's", which I think I'm just fine knowing nothing about.

[GolfSpy_X]

Titleist is actually the smallest piece of Fortune Brands portfolio Sactown.

 

For FB, Titleist and Cameron are just a line on a spreadsheet?

What other brands do they own that I would recognize?

[Moecat]

For FB, Titleist and Cameron are just a line on a spreadsheet?

What other brands do they own that I would recognize?

http://www.fortunebrands.com/brands/

[putterplating]

Nike makes everything in China except for a few items for tour players that are done at the Oven. This is why Nike and Bettinardi never went anywhere before he went to Mizuno.

 

Do you really think Scotty wants his putters made overseas again after the Pro Platinum debacle? Of course he may not have any say in the matter depending upon how his contract with Titleist is written.

 

Chris,

 

What was the "pro platinum debacle"? Are you referring to the skim milling discussion on the stainless models?

 

Kevin

[GolfSpy Dave]

I took a quick look at the fortune brands website. The names that jump out at me are Moen, MasterLock, Jim Beam, Suaza, Maker's Mark, and El Tesoro. They apparently are also responsible for some sort of spirit called "Cockburn's", which I think I'm just fine knowing nothing about.

 

 

Titleist is actually the smallest piece of Fortune Brands portfolio Sactown.

This is really interesting then, because as a bottom line issue, the sale is minor. From our golf side it is huge, but to them not so much. Corporate streamlining.

(Not going to google Cockburn's either)

[GolfSpy_X]

Actually not minor at all Titleist you are talking about 6-8 Billion dollars...which could put a steep amount of 0's to their cash flow. And it would do two things for them. 1 get them out of a more volatile market and 2 push their stock price.

 

This is really interesting then, because as a bottom line issue, the sale is minor. From our golf side it is huge, but to them not so much. Corporate streamlining.

(Not going to google Cockburn's either)

[SunsetBeachCustomPutters]

Chris,

 

What was the "pro platinum debacle"? Are you referring to the skim milling discussion on the stainless models?

 

Kevin

 

 

The Pro Platinum and the all over the place metal that was used in the product. They were produced overseas. They either skimped on the metal knowing the product would be plated and "hidden" or because the metal looked bad they plated it. The story varies depending upon who you talk to.

 

Either way it was horrible metal, I have seen a stripped model break moving them 2-3 degrees for lie. I have seen some that looked fine without the plating and seen some that were horrible. It could be because of skim-milling a cast head, never really paid attention.

[GolfSpy Dave]

Actually not minor at all Titleist you are talking about 6-8 Billion dollars...which could put a steep amount of 0's to their cash flow. And it would do two things for them. 1 get them out of a more volatile market and 2 push their stock price.

http://www.gurufocus.com/StockLink.php?type=sec&symbol=FO&date=2009-11-06&report=10-Q

Here is the most recent report on them that I can find. If Tltleist is 6B then it is a huge part of their asset list. My non=professional lookings at this data finds about a 500M loss last year.

I would sell some stuff too.

[jamo]

Nike makes everything in China except for a few items for tour players that are done at the Oven. This is why Nike and Bettinardi never went anywhere before he went to Mizuno.

 

Do you really think Scotty wants his putters made overseas again after the Pro Platinum debacle? Of course he may not have any say in the matter depending upon how his contract with Titleist is written.

 

If Nike buys Scotty that doesn't mean that his putters will be made overseas. I think Nike is smart enough to realize that Scotty is doing very well milling his putters in America. If I had to guess, I would think that Nike would still release putters under the Nike brand. They just wouldn't be able to charge the full price of a Scotty.

[GolfSpy Dave]

If Nike buys Scotty that doesn't mean that his putters will be made overseas. I think Nike is smart enough to realize that Scotty is doing very well milling his putters in America. If I had to guess, I would think that Nike would still release putters under the Nike brand. They just wouldn't be able to charge the full price of a Scotty.

Are the OTR Camerons milled in the US?

[Moecat]

Are the OTR Camerons milled in the US?

 

I don't believe so ... still made in China if memory serves

[jamo]

I don't believe so ... still made in China if memory serves

 

Oh, never mind then.

[SunsetBeachCustomPutters]

I don't believe so ... still made in China if memory serves

 

OTR Camerons are made in the US. The name of the facility escapes me now, but this has been verified.