The Pellucid Perspective - January 2011 - (Page 12)

EQUIPMENT Yes! Golf the recession’s latest victim Niche putter company’s demise another sign of increasing industry consolidation By Jim Dunlap he bankruptcy auctioneer’s gavel will close the curtain on Can small companies survive? Yes! Golf ’s 13-year run on January 18, ending the DenAlexander, McAndrew and Ricci all agreed that in today’s ver, Col.-based putter manufacturer’s uphill battle to sur- golf industry, small manufacturers face an existence fraught vive the minefields of the golf equipment industry. It remains with peril. Gaining initial consumer acceptance for a new prodto be seen whether any new buyer will retain the Yes! Brand, or uct is difficult enough, but building upon that to achieve mass merely market the company’s C-groove technology and other distribution and profitability is even more challenging. intellectual property under the buyer’s own label or something “What Adams Golf did in the 90s is virtually impossible entirely new. to duplicate today,” Alexander said, referring to Barney AdFrancis Ricci, Yes! Golf ’s CEO, told The Pellucid Perspec- ams’ start-up company that built on the initial success of the tive that the company’s downfall can be Tight Lies fairway woods to today’s leadblamed on three factors – the current reing position as a manufacturer of hybrid “These are difficult cession, under-capitalization and the canclubs. “It [equipment start-ups] is such an times,” said Terry cellation of a $1 million order for 20,000 untenable part of the business. Today, it Yes! putters by one of the company’s disseems like you either get a massive order McAndrew, publisher tributors last year. or you get no order [from distributors or of the Web Street Golf “When the recession took hold, it hit retailers]. And if you’re a smaller compaus hard,” Ricci said. “In 2007, we sold just Report. “Any company ny and you do get that massive order, you under 200,000 putters. In 2010, we’d sold can’t fill it.” that’s not well capitalless than 40,000 by the time we had to file Ricci agreed that companies like Yes! for bankruptcy [in December].” have been squeezed by retailers, particuized is in jeopardy. The collapse of Yes! and its holding larly since the onset of the recession. They’ve got to be able company, Progear Holdings, is the lat“We noticed that especially when est in a long casualty list of sad stories retailers said they were not going to orto insulate themselves involving manufacturers who appeared der more [product] unless we gave them in tough times, and to have hammered out a solid niche in just an incredible deal,” Ricci said. “We the industry and the minds of the equipcouldn’t do that like the larger companies right now there’s an ment-buying public, only to fall victim who have other product lines could.” oversupply in both to either insufficient capitalization, the The fate of Yes! Golf could serve as a guidepost to other niche product manucreation of new technology by rivals, or product and inventory.” the crushing competitive pressure exertfacturers who have achieved a degree of ed by bigger, richer and more diversified success, but are exhausting their capital competitors. reserves in order to move to the next level. “These are difficult times,” said Terry McAndrew, publisher Ricci said that Yes! missed its chance to take the money and run of the Web Street Golf Report. “Any company that’s not well several years ago. capitalized is in jeopardy. They’ve got to be able to insulate “In retrospect, we should have put the company up for sale themselves in tough times, and right now there’s an oversupply in 2007 or early in 2008,” Ricci said. “We had some companies contact us around that time, but they were mostly interested in in both product and inventory.” Casey Alexander, an analyst with Gilford Securities who licensing, and that wasn’t what we were looking for. I always covers the golf industry, likens the daily battle for market share, thought Nike should have bought us. They’d already produced profitability and even survival in the golf equipment industry to 100,000 putters before they even started advertising them, so a UFC or professional wrestling event. they’d spent around $100 million just trying to get into the put“The overall business is like a steel cage battle royale for ter business. They could have bought this company for $10 milmarket share,” Alexander said. “There are all these companies in lion.” there fighting, and the only way you lose is to get thrown out of As of January 18, it seems likely that someone will buy the n company for substantially less than that. the ring. Well, Yes! Golf just got thrown out of the ring.” T 12 The Pellucid PersPecTive January 2011

Table of Contents for the Digital Edition of The Pellucid Perspective - January 2011

The Pellucid Perspective - January 2011
Municipal Courses Face Major Property Tax Challenge
Dec YtD Weather Impact, Nov YtD Utilization
2011 Equipment News Highlighted by Acushnet Fate
Is Groupon Good for Golf?
Symposium Examines Varied Aspects of Affordability in Golf
Dallas, Tx Core Business Statistical Area (CBSA)
Yes! Golf the Recession’s Latest Victum
Year of Change for Golf, for Better or Worse?

The Pellucid Perspective - January 2011