11/8/06 - Callaway Golf Company announced yesterday that they are expanding their sales channel, to leverage their extensive network of "brick and mortar" retailers (especially "green grass"/on-course retailers that usually do not have a strong online presence) with a new sales channel at shop.callawaygolf.com.
As reported in yesterday's press release from Callaway Golf Company:
CARLSBAD, Calif., Nov 08, 2006 (BUSINESS WIRE) -- Callaway Golf Company (ELY
Callaway Golf Company 
ELY ) today launched Shop.CallawayGolf.com, an innovative alliance between Callaway Golf and its vast network of authorized U.S. retailers that provides a new level of service, security and convenience to online consumers. This breakthrough online shopping experience links consumers and superior golf retailers by permitting the consumer to place an order through Callaway Golf's website and have it fulfilled by a local participating retailer. The new site also will be accessible via the Company's main website, www.CallawayGolf.com.
A complete lineup of official Callaway Golf and Odyssey products will be featured at Shop.CallawayGolf.com, including the latest in drivers, fairway woods, hybrids, irons, golf balls, footwear, eyewear, apparel and accessories. Moreover, each and every product offering on the website is backed by the extensive inventories maintained by authorized retailers and Callaway Golf, making it far more likely that consumers will find what they want when purchasing through Shop.CallawayGolf.com.
"This is a breakthrough in retailer integrated e-commerce and an important step in the continued growth and evolution of Callaway Golf," said George Fellows, President and CEO. "It benefits consumers, retailers and Callaway Golf, adding confidence and convenience to the consumer's online experience while further enhancing Callaway Golf's market share and our partnership with our trusted retailers. Callaway Golf leads the industry with a commitment to innovation, and this superior online commerce tool furthers our leadership position."
"We are the first and only golf equipment manufacturer to act as the convenient and secure link between the growing number of online consumers and our vast network of authorized retailers," said Steve McCracken, Senior Executive Vice President. "With Shop.CallawayGolf.com, we will link consumers with local retailers who have what they want, backed by the reliability of Callaway Golf's complete customer service and support infrastructure."
When an order is placed, it is in turn presented electronically to participating authorized retailers via a user-authenticated and encrypted site. These retailers then have the opportunity to fulfill the consumer orders. Shop.CallawayGolf.com features an automated system that uses an algorithmic selection mechanism to determine the retailer that can most efficiently fulfill an order based on such attributes as geographic proximity and inventory availability. The selected retailer will ship the order directly to the consumer. Shop.CallawayGolf.com is only available to consumers in the United States.
For most of our retailers - including most of the vast network of green grass golf professionals -- who do not currently have Internet capability, Shop.CallawayGolf.com provides them with a presence on the web without the technological, marketing and customer service costs associated with e-commerce. Callaway Golf is the first golf manufacturer to build an electronic bridge between online consumers and the community of golf professionals that permits the two groups to do business with each other in a convenient and secure manner."
In related news reported in Barron's over the weekend of Nov. 4: By A.G. Edwards & Sons ($13.12, Nov. 1, 2006)
We believe that in the next 12 to 18 months Callaway management will either: 1) correct operational execution errors of 2005 and 2006, allowing 2006 cost savings to flow to the bottom line, enhancing 2007 and 2008 fundamental earnings to a relatively sustainable earnings of at least $1.20 in 2008; or 2) should fundamental performance not materialize, public or private investors will likely force a change in control to enhance/unlock shareholder value.
Either way, we believe investors have an attractive risk/reward scenario that likely materializes if management succeeds or fails -- i.e., no middle ground. The ongoing long-term fundamental outlook for the golf industry remains challenging largely due to industry competitive forces, the maturity of major geographic regions and weather.
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