A golf expert (@golfunfiltered) speculated last month that Callaway golf equipment would break off its partnership with Topgolf on TikTok. And this week, Topgolf Callaway announced its plan to split into two companies.
Now, that same expert is skeptical about its future. And viewers agree.
The two companies first merged in 2021, when Topgolf investor Callaway purchased the network of golf entertainment venues.
Topgolf Callaway announced a slight drop in overall revenue in August.
“Topgolf continues to expand, and earnings are just not being realized,” @golfunfiltered says in his TikTok. “For the number of locations that are opening, we may have also hit a saturation point with Topgolf.”
In the second quarter of 2024, Topgolf revenue increased by 5% due to new venues, but same venue sales were down 8%.
Why is there a decrease in Topgolf sales?
This is due to high inflation and slower traffic, said Topgolf Callaway’s CEO Chip Brewer in the second quarter report.
In his TikTok, @golfunfiltered speculates that the sales decrease was due to the companies’ high prices.
The TikTok has around 590,000 views.
“It’s not uncommon to spend almost $300, depending on your group size, every time that you go there,” he said.
Several viewers agreed with his speculation.
“Top golf got too expensive,” one viewer wrote.
“My local driving range has Toptracer, a restaurant, a bar, and is a fraction of the cost,” another agreed.
It can cost anywhere from $15 to $65 an hour to play at Topgolf, depending on the location, day of the week and time.
“Topgolf alienated individual golfers,” one viewer wrote.
However, according to Topgolf’s frequently asked questions page, people can play alone.
“You go one time, say ‘That was kinda cool,’ and never go back,” another viewer wrote about Topgolf.
“Is this the beginning of the end for Topgolf?” @golfunfiltered wrote in the caption of his video.
@golfunfiltered Is this the beginning of the end of TopGolf? #golftiktok #golftok #golf ♬ original sound – Golf Unfiltered
The future of Topgolf
At the end of August, Raymond James analysts said they expect Topgolf Callaway to underperform compared to the rest of the market. Before, they had expected it to outperform. TikToker @golfunfilted posted a video response on Sept. 1.
In the video, which has about 40,000 views, he criticizes Topgolf Callaway’s business model.
“They try to sell you stuff, and I don’t know anybody that goes to Top Golf Callaway to get a club fitting or to go and buy golf clubs like I just don’t know if that happens. And clearly it’s not happening fast enough, especially in comparison to some of the competitors in the market,” he says.
However, it is not the “beginning of the end for Topgolf,” according to Topgolf Callaway’s recent announcement.
Instead, Callaway and Topgolf will once again become separate companies.
Shareholders of Topgolf Callaway will most likely still receive shares in Topgolf.
“Topgolf has a different operating model, capital structure and investment thesis than Callaway, and as a result, the Board has determined that separating Topgolf will best position Topgolf and Callaway for success and maximize shareholder value,” CEO Brewer said in the company’s Sept. 4 announcement.
Golf expert @golfunfiltered said Callaway “is trying to save a little bit face” in a response video.
“Personally, I don’t think that this is really the reason,” he says in response to Brewer’s comment. “If you’re Callaway, why do you want to be associated with this anymore? That’s the reason that they want to split these two up. I mean, you’re losing money by the boatload if you keep the Topgolf side of things with your main parent company name, as well as everything else that you couple together.”
The Daily Dot contacted Topgolf Callaway Brand for a comment, but the company did not immediately respond. The same goes for @golfunfiltered.
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The post ‘Beginning of the end?’: Expert says Topgolf might soon fold after Callaway call. Here’s why appeared first on The Daily Dot.
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