By ADAM SCHUPAK
Senior WriterThe CEO carousel has taken another turn at ailing apparel maker Ashworth.
Following another weak earnings report last month, the Carlsbad, Calif.-based company announced the appointment of Allan Fletcher as its new chief, its third leadership change in the past year.
Fletcher is the founder and chairman of Fletcher Leisure Group, a major Canadian supplier of branded golf apparel, sportswear and golf equipment, and an Ashworth distributor for the past decade.
He replaces Peter Weil, who succeeded Randy Herrel Sr. as CEO in October 2006. Weil resigned to spend more time with his family, but will continue to consult with the company for a limited time.
Odds are, Fletcher will need all the help he can get to reverse Ashworth’s fortunes. By its own admission, the company strayed from its once-successful formula of innovative designs geared for golfers and chased growth by selling apparel at discount stores, damaging its reputation in the process. Uninspired lines of late and a slow reaction to the performance fabrics boom compounded Ashworth’s problems.
“We need to get back to our original roots,” Fletcher says. “That means the golf category and rebuilding Ashworth back into an authentic golf brand and the leadership role it once enjoyed.”
Fletcher, 63, who has worked in the golf industry for 42 years, agreed to a contract with a bargain base salary of one dollar and a performance-based bonus of $500,000. He also will be awarded an option to buy 100,000 shares of Ashworth common stock at an exercise price equal to the fair market value of the company’s shares on the grant date.
The leadership change comes less than two months after Ashworth delivered its fourth consecutive quarterly loss. For its third quarter ended July 21, Ashworth posted a loss of $5.7 million compared with net income of $700,000 for the same period a year earlier. Consolidated net revenue fell to $49.5 million, down 6.4 percent.
Fletcher’s arrival, Ashworth’s directors hope, will signal a period of stability for a management team that has endured much change.
Since Herrel’s departure, the company has:
• Welcomed in January the return of company founder John Ashworth as chief creative officer.
• Laid off 16 employees in May, including president Gary Schneiderman, whose position was filled by Eddie Fadel.
• Hired Peter Bourgeios, senior vice president sales, to replace Peter Holmberg, executive vice president of green-grass sales and marketing.
• Brought back Barry Grimes, who created the company’s iconic “Golf Man,” as its vice president and chief brand officer.
• Appointed Greg W. Slack as chief financial officer. Slack had served as the company’s vice president of finance and corporate controller until July. He is the company’s fifth CFO in the past 2 1/2 years.
Among Fletcher’s top priorities is restoring Ashworth’s brand cache, which has been diluted.
“The channel of distribution has been cleaned up, and it will stay cleaned up,” Fletcher says.
The company already has reduced its department store accounts to 115 from 385. In the short-term, however, such discipline has proved costly: Ashworth’s revenues for that channel were $1.7 million, down 43.7 percent from the third quarter of 2006. Ashworth's stock has languished below $10 all year. It reached a 52-week low of $5.19 on Oct. 31.
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Adam Schupak is a Golfweek business writer. To reach him e-mail aschupak@golfweek.com.
Posted: 11/2/2007
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