A conversation with the CEO of Magique Golf

April 30, 2008

Interviewer: We are here today with Bill Sheppard, CEO, of Magique Golf. Good morning Bill and thanks for taking some time today to answer a few questions about Magique Golf.

Bill: My pleasure. We always appreciate the opportunity to tell our story.

Interviewer: Let's start at the beginning. How long has Magique been in the custom club business?

Bill: Actually Magique was founded twenty two years ago, by two Golf Professionals, Bill and Cathy Cornelius. Cathy is best known for having won the US Open in 1956. The company originally focused on selling components to club makers and building price point alternatives to premium golf clubs. S3 Golf purchased Magique in April of 2004 and began a transformation of the company.

Interviewer: You mean Magique's mission of custom fitting just began in the past few years?

Bill: Yes, that is correct. It is the current breakthrough in the golf business. The true differentiator left in performance improvement of the golf club.

Interviewer: What do you mean by that? The last differentiator left. I thought club companies were innovating every day with Square Drivers, Max MOI, new materials and so forth.

Bill: Technology in the golf club is controlled by the rules of golf as set forth by the USGA. They determine size, materials, and configuration and performance metrics for the equipment. If a club company designs their equipment to the maximum extent allowable under the rules, there is not a technology advantage from one company to the next.

At Magique we recognized this a number of years ago and have focused on designing equipment that takes full advantage of the technology under the rules and custom fitting each club to the player. It is the fit that matters today........

Interviewer: So let's back up for a moment. You mentioned S3 Golf acquired Magique. Who is S3 Golf?

Bill: S3 Golf is a company founded and run by Golf Professionals and Engineers. We are unique in the golf business from that standpoint. We have a passion for the game, and have expertise, in teaching, fitting and engineering technology. All of our equipment is designed by us, in a collaborative fashion between the Golf Professional and the engineer. The Golf Professional sets the overall criteria in terms of the golf club. How it should look, feel and perform for the average player. The Engineer then adapts and applies the technology, materials and science to create an outstanding club, which when correctly fit will perform extremely well. That is the breakthrough available to the average player today at Magique.

Interviewer: So S3 Golf runs Magique. Why not change the brand and start over with this fitting expertise?

Bill: Good question. There was a good deal of value in the Magique brand. Although the company had declined in the few years preceding our acquisition, we felt we could resurrect it with our fitting expertise. And, we have done so. After four years we have introduced several new models of clubs, and are custom fitting each and every one of them to our customers. By the way, Tour Players have benefited from custom fitting for years. They do not play off the rack clubs, the equipment companies build them specifically for them. What we have done is to develop the same capability for the average player.

Interviewer: How does your fitting process work?

Bill: We have developed a proprietary fitting system that couples advanced launch monitor technology with our software. It is an integrated system that analyzes a player's physical attributes, (called static fit), and their dynamic attributes, (the swing) and determines a precise specification for the club. These specifications, include loft, lie, length, flex, kick point, and grip among other things. Blending all of these factors into a club that performs well when the swing is executed correctly, but of equal importance it minimizes the effect of a miss hit..........It improves the players game.

Interviewer: Ok, so you have a proprietary fitting system. Don't most of the Big Box Retail Golf shops have this equipment? Can't anyone do this? What about the other equipment companies?

Bill: Most equipment companies are moving in this direction. However, they are following us. We have been doing this for quite some time and are known for our expertise in this area. Many of the Retailers, will measure you for height, hand size, etc. Some will even put you on a launch monitor. But none have brought all of this together into a comprehensive system that precisely specs out your club.........

Interviewer: How good is your system?

Bill: It is good enough that it has been licensed to learning centers through out the country. These are staffed by PGA Teaching Professionals and are primarily focused on teaching. Now each student is fit as part of their lesson plan using our system. Many wind up buying our clubs as a result.

Interviewer: Wow, so this system really does work. What is the name of these learning centers and how long have they been in place?

Bill: Well, we have been in development with them for the past sixteen months and just launched the systems in February. We are in nearly 100 locations thus far and will grow by 50 per year over the next five years. The beauty of this model is that people can take lessons throughout the year regardless of weather. Many of these centers are in cold climates and players can work on their games even when it is snowing.

Interviewer: What is the name of this company?

Bill: I can not disclose that right now. We plan a joint announcement in a few weeks and will have a press release at that time. Our partner is completing their installations of the system as we speak. Some of the locations are brand new this year so there is a good deal of work they must do to prepare. In fact they are adding 50 new locations this year alone.

Interviewer: So do players have to come to you or your partner to get fit? Isn't it important that they be on the launch monitor to achieve this level of results?

Bill: No, not really. We have developed so much expertise in the fitting area that we can do this over the phone.

Interviewer: Without the software and launch monitor?

Bill: Without the launch monitor, but still using our software. You see, we can determine the players swing characteristics thru a series of fitting questions that tell us how a player's swing performs. We use these questions to determine their ball flight, club head speed and so forth. The physical characteristics like height, hand size sleeve length, hand to floor, etc, can all be handled over the telephone. In fact we have fit thousands of people this way for the past four years and great success.

Interviewer: How do you know this has been successful?

Bill: By Customer feedback. We follow up after the player receives their club to ensure it is meeting their expectation. In almost every case it does and many of them order additional clubs as a result. If it does not meet their expectation, we try to make it right.

Interviewer: This is an exciting growth story for you. You must be pleased. One last question if I may. I am sitting here in your facility in Tempe Arizona and frankly I am surprised. This building is in an industrial park, not a retail center. Why is that?

Bill: We care so much about the performance of our product and the precise fit, that each club must be manufactured here in our factory. The majority of this facility is our factory. It is dedicated to building each club in a custom fashion. You can not build custom fit clubs offshore. Consequently we have chosen to locate here with our factory. Custom fitting requires constant interaction between the Fitter and the Club maker. That happens right here. Our Customers locally know where we are, and our Customers nationally contact us thru our 800 number or our website. It works for us.

Interviewer: Bill thanks for taking the time today to talk with me. And, thanks for the fit and the tour of your facility.

Bill: My pleasure, thanks for giving me the opportunity to tell our story.