NGF TOP 100 BUSINESSES IN GOLF
Chip (Oliver G.) Brewer, President & CEO
Harry Arnett, SVP, Marketing and Brand Management; President, OGIO International
Dr. Alan Hocknell, SVP, Research & Development
Glenn Hickey, SVP, Americas Sales
Callaway Golf has an unquestioned footing as one of the leading equipment manufacturers in the golf industry, with a highly visible presence both among the general golfing public and on the major professional tours. Callaway designs, manufactures and sells golf clubs, golf balls, golf bags and other golf-related accessories.
Callaway’s golf clubs segment consists of its woods, hybrids, irons and wedges, as well as putters from Odyssey Golf. This segment also includes other golf-related accessories, royalties from licensing of its trademarks and service marks and sales of pre-owned golf clubs. The golf balls segment consists of Callaway Golf and Strata balls that are designed, manufactured and sold by the company. It sells its products to retailers, directly and through subsidiaries, and to third-party distributors.
More than 50 pros on the PGA and European PGA tours have Callaway sponsorship deals, with Phil Mickelson, Sergio Garcia, Henrik Stenson and Jim Furyk being the most prominent among them. Michelle Wie, Morgan Pressel and Yani Tseng are among Callaway’s endorsers on the LPGA Tour.
The company was founded by former Burlington Industries President Ely Callaway Jr., an avid golfer who bought half of Hickory Sticks USA in 1982 and in the early days sold clubs out of the back of his Cadillac. Callaway said he wasn’t a good enough salesman to sell a mediocre product, so tasked his company with building clubs that are “pleasingly different and demonstrably superior.” That’s been the Callaway mantra for about three decades.
The company has recently made several significant acquisitions at a time when the industry is undergoing consolidation, most notably of OGIO International (for $75.5 million) and apparel brand TravisMathew ($125.5 million). Both of these companies could be considered Top 100 golf businesses in their own right, but now fall under Callaway’s umbrella.
“Our success over the last couple of years has allowed us to reinvest in our business, including investments in our (Chicopee, Massachusetts) golf ball plant, and in sales, marketing and research and development, and it has provided us with the wherewithal to acquire the OGIO and TravisMathew brands,” Callaway President and CEO Chip Brewer said. “We believe these investments and acquisitions will provide benefits for years to come.”
In 2017, Callaway’s sales increased by $178 million (approximately 20 percent year-over-year), a reflection of the success of the company’s EPIC line of products as well as the Chrome Soft golf ball franchise.
“Our brand momentum remains strong,” Brewer says of Callaway, whose Wall Street ticker symbol is ELY in honor of the company’s founder.
“Admittedly, our success in 2017 has made 2018 a high hurdle,” Brewer said, “but we believe we are up to the challenge. Looking ahead, we are encouraged not only by improving golf industry fundamentals but also by the strength of our 2018 product line.”
Key investments in Golf Entertainment venue Topgolf, an improving position as the #2 ball manufacturer, and an innovative approach to digital media have continued to distinguish and define Callaway’s approach.
Callaway has been behind a number of notable advancements in the equipment sector, perhaps none bigger than the Big Bertha and Great Big Bertha drivers, which ushered in the era of “oversized” club heads. The company also introduced the first-of-its-kind hex dimple pattern that yielded 100 percent dimple coverage. Callaway’s S2H2 line (short, straight, hollow hosel) was one of the company’s early successes and led to the Big Bertha line. In addition to the ascendancy of the Callaway’s Epic line, the company recently resurrected the Apex name for a line of irons, having acquired rights to the trademark when it purchased Ben Hogan Golf in the early 2000’s.
Clubs and balls remain the meat and potatoes of Callaway’s business — the success of Epic and Rogue bear this out — but as the company expands it continues to target other growth markets within the industry, apparel and accessories among them.