Global Edition

Letters in receivership

9.00am 14th July 2005 - Corporate

After several days of rumour it has been confirmed that John Letters of Scotland Limited, professional clubmakers since 1918, is in receivership. Fraser Gray and David Whitehouse, partners in Kroll’s Corporate Advisory & Restructuring Group, have been appointed Joint Receivers.
The Glasgow-based business employs thirteen people and manufactures, retails and distributes golf clubs and equipment. The receivers say that their appointment has been necessary due to trading difficulties in a competitive market place. They are reviewing the options for the business, which includes a number of valuable brands.
Fraser Gray, commenting on the receivership, said, “John Letters of Scotland Ltd is a well known brand name and is renowned for its top quality golf clubs and equipment. It is unfortunate that due to the competitive market place it has been put into receivership after so many years in business. While it is an early stage of the receivership, we are hopeful that we will be able to conclude a deal and are following up on interest.”
It was only last January that the company responded to the demands by retail chains for an increasingly bigger margin by deciding to offer its high quality golf clubs directly to the public both on the Internet and through a UK network of factory shop.
“When in-store sales staff are paid more commission for selling our clubs than we get for manufacturing them you have to take stock of the situation,” Gordon White, managing director, had said at the time to explain the decision.
There were plans for outlets in northwest England, the Midlands and the south of England in addition to the stylish factory shop at the company’s Hillington HQ, close to Glasgow’s retail area and road links.
Gordon White continued, “Rather than have to go down the road of offering inferior quality products in order to make a profit, we decided to go directly to the public. We can no longer supply retailers at a price which enables us to make a profit and them to make a profit whilst ensuring a competitive price and high quality product for the consumer.
“I don’t think the public realises how many brand names the retailers actually own, very often they apply that name to cheap, off-the-shelf products, which we consider are largely untested and usually manufactured from inferior materials. These ‘brand owners’ can buy a set of clubs off the shelf in China for around £30, add the brand name and sell them for £299. John Letters is proud of its heritage and its reputation for innovative, well-produced golf clubs and is not prepared to offer the consumers anything of inferior quality.”
Gordon Rennie, co-owner of John Letters and the company’s design and development director, is a highly respected industry figure and is one of last apprentice-trained golf club makers in the world, having worked extensively in Europe, the USA and Asia.
John Letters of Scotland

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