PLANYC 2030

 

Tiger Woods fans have put up with the philandering, the text messages and the domestic spats. Now comes what may be the hardest thing of all to tolerate: Losing.

Woods has played through the year without a single tournament win, putting him at 83rd on the PGA Tour’s money list. As his performance slumps, so have sales of his apparel line through Nike Inc., according to retailers Golfsmith International Holdings Inc., Roger Dunn Golf Shops and Golf Discount Superstore.

Golf apparel sales overall are on the rise, signaling consumers are returning to the course, just not to Woods. Nike gets about 10 percent of its golf sales from the Woods brand, whose shirts, jackets and pants are among the most expensive clothing the sportswear maker sells.

“Apparel is hot right now,” said Laura Dowdy, the clothing buyer for Roger Dunn, which has more than 20 stores. “Everything — Adidas, Puma, Nike, except the Tiger brand.”

Nike, based in Beaverton, Oregon, doesn’t disclose sales for the Tiger Woods Collection. Nike gets about $650 million in sales tied to the sport, according to Matt Powell, an analyst at Charlotte, North Carolina-based researcher SportsOneSource, who provided the estimate for sales of the Woods line.

“We support Tiger and never underestimate his abilities as a competitor,” Nike spokeswoman Beth Gast said in an e-mail. “He’s a phenomenal athlete with over 70 wins on the PGA Tour and 95 wins worldwide.” She declined to comment further. Woods’s representatives did not return calls or e-mails seeking comment.

Volume Slump

The line’s volume through the first half dropped 7.5 percent from a year earlier at Golfsmith’s 76 stores, Chief Executive Officer Martin Hanaka said in an interview. Total golf apparel sales climbed 11 percent over the same period at the Austin, Texas-based retailer.

Nike fell 90 cents, or 1.3 percent, to $70.05 at 4 p.m. in New York Stock Exchange composite trading. The shares have risen 6 percent this year.

“The Tiger effect has been negative this year,” Hanaka said. “Fortunately, other Nike products and other brands have been doing well, so we’ve been able to overcome it.”

Nike’s apparel sales climbed 13 percent in the quarter ended May 31, and its golf apparel sales also have climbed about that much this year, according to Powell. The retailer is now selling the fall 2010 men’s collection on its website. The cover boy? Not Tiger. It’s 2009 British Open Champion Stewart Cink. Woods appears in a list of “athletes” on a linked page.

Fallen Champion

Other than his rookie season, when he finished 24th, Woods has been in the top four on the money list every year on tour. This month, he recorded the worst 72-hole score — 18 over par – - of his professional career.

“When Tiger’s doing well, people watch and buy his brand,” said David Martin, a branding expert with almost three decades of experience who runs Interbrand’s New York office and global golf practice. “When he’s not, people decide not to watch and they buy something else.”

Online retailer Golf Discount Superstore said it’s seen a “definite decline” for the brand. Roger Dunn, a division of Santa Ana, California-based Worldwide Golf Enterprises Inc., says almost all other apparel products are growing save for Tiger’s line.

Personal Problems

“Before, he was a champion,” said Patrick Rishe, a sports business professor at Webster University in St. Louis, Missouri, and director of Sportsimpacts, which analyzes the economic impact of sports events. “He conveyed discipline and consistency. Now he’s lost that aura of perfection, on and off the course, and there’s no way Nike can create that aura again.”

Woods’s personal problems haven’t helped. Yesterday his lawyer announced that his divorce from model Elin Nordegren was completed, nine months after reports of his extramarital affairs surfaced.

Woods, 34, crashed his Cadillac sport-utility vehicle into a fire hydrant outside his Florida home last Thanksgiving, leading to his admission that he had relationships with several women during his marriage. One of those women, Joslyn James, created a website showcasing alleged text messages from the golfer that described various sex acts.

Nike first signed Tiger Woods to a five-year endorsement contract in 1996. The retailer has described the Tiger Woods Collection, launched in 1999, as “Nike Golf’s top-of-the-line apparel,” with sweaters and pants that cost more than $100 on the company’s Web site.

Nike hasn’t discounted its Woods Collection apparel and probably won’t, according to Powell, who says the company is counting on Woods returning to form and being “an important part of its portfolio.” Golfsmith also has no plans to lower prices for the brand, according to its chief marketing officer.

Nike Challenge

“The challenge to Nike is that we’ve never seen Tiger Woods weak before, and it’s completely antithetical to what his brand is,” Interbrand’s Martin said. “Some athletes can ski off into our memory as stars, but for Tiger, unless he gets it together this winter and starts winning, his career trajectory is a double-black diamond,” or exceptionally steep slope.

Not everyone has abandoned Woods. Clint Utz, 28, said he owns about 15 Tiger Woods Collection shirts and has bought several this year.

“All of a sudden, so many people were against him, but he’s still the same person that worked hard and achieved things no one else has ever achieved,” said Utz, a marketing director for Landscapes Unlimited, based in Lincoln, Nebraska. “Everyone loves a winner. They’ll come back.”

 

 

Apple Inc. is boosting efforts to appeal to a new type of customer: small businesses.

The consumer electronics giant responsible for the iPhone is seeking to hire engineers in as many as a dozen U.S. retail stores to put together Apple-based computer systems for small businesses, according to recent job postings on Apple’s website. The employees would implement computer systems for clients and are expected to be proficient in networking hardware and server platforms.

“Thousands of businesses run on Apple products,” the posting reads. “Many more would like to, and that’s where you come in.”

The new positions mark the latest development in Apple’s evolving strategy, which has historically focused on the consumer market and niche businesses, like design and media firms. Now, Apple wants to leverage its popular iPhone and iPad devices, using their appeal as a selling point for more expensive products, including its line of Macintosh computers and servers. (See related article on C10.)

Apple is targeting smaller, local businesses that it can reach through its chain of nearly 300 retail stores, according to two Apple employees familiar with the company’s strategy. The new jobs could pay up to $80,000 a year, one of them said.

Each of Apple’s stores already has at least one salesman dedicated to managing accounts with local businesses, the employees said. Recently, Apple also began recruiting from within the sales staff to create a specialized team that negotiates leasing and pricing terms for business customers, one of the people said. Some stores have seen revenue more than double after implementing the program, the person added.

An Apple spokeswoman declined to comment.

The focus on smaller businesses is unlikely to push Apple into further competition with big computer makers like Hewlett-Packard Co. and Dell Inc., though it could upset its network of authorized consultants, who often serve local businesses.

Targeting smaller businesses could prove lucrative. North American businesses with fewer than 1,000 employees are expected to spend $310.8 billion on information technology this year, according to industry tracker Gartner. The figure is seen rising roughly 6% to $328.3 billion next year. Capturing part of those sales could boost Apple’s annual revenue, which is expected to grow 46% to $62.6 billion this year, according to consensus estimates from Thomson Reuters. “They’re well aware of the opportunities in business,” said Gleacher & Co. analyst Brian Marshall. “This is something they’re focusing on even if they’re not talking about it publicly.”

Apple has had mixed results trying to crack the business market in the past. Its computers are generally more expensive than comparable PCs, prompting cost-conscious companies to look for cheaper alternatives.

Apple’s retail staff historically hasn’t provided the hand-holding and on-site support that many businesses expect. Instead, it has cultivated a network of authorized consultants, many of whose customers are referrals from Apple’s retail employees.

“Almost half of our new customers come from the Apple Store,” said Allen Cleaton, owner of Virginia-based MacPro Solutions. He said local businesses often come to him because Apple’s staff generally don’t have the level of technical expertise needed to set up and maintain a businesses computer network.However, Mr. Cleaton said that if Apple starts providing a higher level of service, it could threaten local companies like his own.

The Apple employees familiar with the new position said it was a natural progression of recent initiatives. Apple maintains a team at its headquarters to handle big companies and government agencies, but it has increasingly handed responsibility for small and mid-sized business accounts to its retail stores, the people said.

Apple has put an incentive program in place to manage the growth of these new business initiatives, they said, assigning new business sales staff based on revenue targets for each store.

Apple also has designed specialized conference rooms in its newer retail stores, like those in Minneapolis and Shanghai, which are specifically meant for meetings between sales staff and high-level business executives.

 

The Federal Communications Commission wants wireless carriers to notify their customers before they reach roaming or data usage limits under their wireless service plans, a move to staunch the “bill shock” syndrome that is plaguing the nation.

Bill shock is, quite simply, the unfortunate experience of getting a wireless phone bill that was higher than expected.

Joel Gurin, chief of the FCC’s Consumer and Governmental Affairs Bureau set up by FCC Chairman Julius Genachowski in January, told media on a conference call May 11 that the FCC has fielded hundreds of complaints about bill shock.

While Gurin stressed that his group is not “cracking down” on bill shock, the FCC is raising questions about the issue.

“We are hearing from consumers about unpleasant surprises on their bills,” Gurin said, citing unclear or misunderstood advertising, unanticipated roaming or data charges, and other problems as causes for bill shock. “But this is an avoidable problem. Avoiding bill shock is good for consumers and ultimately good business for wireless carriers as well.”

One remedy for bill shock is to ask wireless carriers such as Verizon Wireless, AT&T, Sprint and T-Mobile to send their customers a short text message warning them that they are approaching their roaming and data usage limits.

This approach takes a page from the playbook of the European Union, which requires carriers such as Vodafone to text subscribers who are racking up roaming charges or getting close to a set limit for data roaming.

“Our sense is that this has not been a particularly difficult thing to implement in the EU … and that the same principle seems to us like it could be applied very well in the U.S,” Gurin said.

public notice to determine whether or not wireless carriers in the United States can follow Europe’s lead.

Gurin said he and his team want to find out from carriers if U.S. providers are already offering such usage alerts, as well as how much they cost to the consumer or the provider.

They also want to know whether technological or other differences exist that would prevent U.S. wireless providers from employing usage alerts similar to those now required by the EU.

The FCC further wants to learn how consumers can now monitor their wireless usage and know when they are exceeding their predetermined allocations of voice minutes, text messages or data usage.

“We really think that consumers should have the same kind of transparency of information when it comes to all kinds of communications services, including broadcast, cable, broadband and other services they may buy, not just wireless and wireline,” Gurin said on the call May 11.

The inquiry into bill shock is just the start.