I Guess This Rules Out Herb Kohler Buying A Ryder Cup For St. Andrews

Thanks to the readers who sent in Rick Romell's story on Herb Kohler's "largely in the red" operation in St. Andrews, which likely ends any dreams we might have of him joining the bidding process for a future Ryder Cup. It also can't have him rushing to spruce up Hamilton Hall when another fixer-upper has been such a huge drain.

The luxury hotel in Scotland overlooks the famed Old Course, site of this year's British Open. Besides the 144-room hotel, Kohler's St. Andrews holdings include The Duke's golf course; Craigtoun Manor, an adjacent rundown mansion Kohler has begun redeveloping; and Hamilton Hall, a dilapidated former hotel overlooking the 18th hole of the Old Course that Kohler bought a year ago and plans to restore.

Depreciation and a big write-down last year on Craigtoun Manor account for most if not all of the cumulative loss of The Old Course Limited since 2005, the financial reports indicate.

The company halted work on Craigtoun Manor after buying Hamilton Hall, which now will be redeveloped first. Meanwhile, the firm last year recorded a 4.9 million pound charge related to the manor, citing the effects of the economic downturn on real estate in the United Kingdom.

Sales for The Old Course Limited totaled 9.9 million pounds in 2009, down from 11.7 million the previous year and 12.4 million in 2007. Sales had been rising until then.

Comments

[Ky Laffoon's Ghost]

Glad to see that Herb is an American Businessman of the New School:

"The losses, and the entire Scottish operation, represent only a tiny slice of Kohler Co.'s overall business, which generated $4.5 billion in sales last year, according to a spokesman.

(snip)

"The company's grittier roots are in foundry work, plumbing fixtures, generators and engines.

"Kohler currently is negotiating with United Auto Workers Local 833, which represents about 2,000 Sheboygan County factory workers, on a new labor contract...

"The firm is seeking such concessions as a five-year pay freeze, a two-tier wage system that would give new hires 65% of what current employees make, and the right to extensively use temporary "flexible" workers who could be dismissed without cause and would receive reduced or no benefits.

"Kohler has said that under its current cost structure its Sheboygan County manufacturing operations 'are not sustainable long term.'"

I wonder how profitable The American Club and Whistling Straits are? Anyway, I heard from a friend the other day about an outing her husband had at WS recently. In 20-30 mph winds his companion lost 18 balls. I'm sure he'll be willing to repeat that experience!

[Mike]

Geoff,
St Andrews is such a magical place for so many of us that it seems like a no-brainer place to build a (golf) business. Well, the facts are this, it is a magical place but it's a very difficult place to make (gobs of) money. Fools have rushed in before as the Gateway Center, Hamilton Hall and other projects attest. St Andrews gets visitor traffic for obvious reasons but perhaps not as much absolute traffic as you may think. Many dream about playing here but don't visit because of perceived travel difficulties, costs, weather etc. Our private residence at Monarchs House is a good example. We are always fully booked the year after a St Andrews Open Championship but any other time we must work hard to secure our bookings. 2 good years out of 10 are not the making of a successful business. If there is one thing I have learned in 10 years of being in business catering to visitors of St Andrews it's this: don't assume the magic of the place will make you work less.

[Press Agent]

Interesting insight into the situation Mike. Many dream about playing St. Andrews, but the reality of actually getting on the old course is much more difficult than one might imagine.

Herb Kohler is an American Hero and is one of the few American Businessmen who hasn't given in to taking his manufacturing to China..etc. Golf is lucky to have him as a fan and proprietor...

[fourputter]

Ah, the memories! My wife's best school friend emigrated from her native Glasgow to attend St Andrew's University in the sixties and lived in Hamilton Hall, until fairly recently a residence hall of the university; in fact after her first year she and another girl occupied one of the bay-windowed suites overlooking the 18th green. We visited a couple of times a year to stay with her and attend University Balls (it all sounds very grandiose - it wasn't); but we never took advantage of the University's arrangement with the Old Course which permitted a student and his (and it was his) guest to play a round for half a crown, PROVIDED they had completed it by 8 am.

I have personal experience of a hotel / great golf course combination in the west of Scotland, and I can attest only too well that for each business day of financial feast there are 100 of famine. Beware; the lorelei of the setting quickly lures you on to the rocks of penury; nonetheless I'm sure Mr. Kohler doesn't mind a tax write-off here and there - it may as well be for a good cause.

[Del the Funk]

Given that backdrop why would Herb be interested in buying/building in the St. Simons/Sea Island area as we've seen reported a number of places?

Oh wait, the McGladrey Classic will be there every year. Mike, do you think that will be enough?

[Lost At Turm]

Do not worry one second about the finances of a guy like Herb K. This is not a hustler crook that is going to go under because some golf investment went down a bit. This is like if you had a $100 and you put a quarter in the pop machine (1970) and the machine didn't work. We have some famous golf real estate hustlers in jail now or that should be in jail or are going to jail soon, you know who I mean. Herb K is just screwing around with golf. Instead of buying expensive paintings he buys golf properties. He probably has expensive paintings too. Great wealth in America is now COSMIC.

[Aunt Blabbie]

Herb going down the toilet would bring a chuckle or two.

[carnaptious and camsteerie]

I rather think St. Andrews chance of getting the RC was blown when Kohler realised he would never get the chance to become an R&A member.

It would appear there are still some things in life that money just can't buy.

Hoorah.

[Mike]

Even if The Old Course Hotel is losing money, I can't imagine St Andrews without it (despite not being fond of the building's appearance). I have to say that I don't know Mr Kohler but I immensely respect and appreciate his patronage of golf. The Old Course is a special place and luckily for all of us St Andreans share it with the world. Visitors need places to rest their heads at night. Mr Kohler's place(s) is just another, of many, options to stay in St Andrews. Don't begrudge the man and his successes just because he happens to have more money than most of us. Donald Trump on the other hand...