The Pellucid Perspective - July 2013 - (Page 11)

While I don’t want to be an alarmist, the April change in fortune on the equipment side is worth noting and bears watching as more of the season plays out (in delayed time). side, we see that Balls took a meaningful drop into negative territory after April’s results were tallied. I’m frankly surprised that we’re not seeing more carnage on the Consumables side and especially in Balls, given the fact that in April our rounds were down nationally 15% and Golf Playable Hours were down 25%. That’s the good news story here; it could be much worse. While I don’t want to be an alarmist, the April change in fortune on the equipment side is worth noting and bears watching as more of the season plays out (in delayed time). Industry analyst Casey Alexander’s interpretation on April sales is that they set up the repeat purchase by facility operators and retailers based on the pull-through of the pre-season buy. Poor April sales potentially have full-season impact in both order quantities and margins (i.e., if the industry struggles to move the initial buy it leads to smaller 2nd orders and earlier and/or steeper markdowns which erode profit). The unique slide in the On Course channel should also be a warning for the average facility operator that the consumer is an ever-vigilant shopper during these times www.PellucidCorp.com of more transparent pricing and ease of purchase in the pure retail and e-tail environments. While I can’t determine from the above figures alone if we’re potentially seeing a continuation of the rotation of sales from green grass to the pure retail environment, I can say that if I were an average facility operator, I’d be thinking hard about whether I should sharpen my retailing skills or further cut back on the breadth of equipment I carry and the risk of inventory and profitability that’s inherent in any retail operation. For the off course folks, flat vs. last year isn’t bad early year performance (given that the channel was up 6% in ’12 vs. ’11), but it’s probably not what’s in their annual sales/profit plans and we’re still meaningfully off the peak equipment sales levels where everyone (well, almost everyone, the green grass segment was still declining in shareof-sales) was happy. We’ll keep an eye on the figures monthly for the balance of the season and, come September (which we’ll report in November), we’ll see if this was an appropriate caution or a case of the boy who cried wolf. n The Pellucid PersPecTive 11 http://www.golfswitch.com/ http://www.golfswitch.com/ http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - July 2013

The Pellucid Perspective - July 2013
Contents
GolfNow buys FORE! Reservations
An inside look at the Fore!-GolfNow deal
FORE! Reservations sells to GolfNow? Preposterous!
PGA of America, Tour (reluctantly) accept anchoring rule
An ominous April for equipment sales
Pace of play campaign picking up speed
June golf weather impact: Flat, but encouraging
Boomers boost Sunshine State market, but clouds looming on the horizon
Cliffs Communities emerge from bankruptcy, Tiger’s course still on hold
Golf fights back, finally

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