A sign of growth or a sign or desperation? With a reported operating loss of more than $47 million the first nine months of this year and only two “core’’ golf entertainment facilities planned for openings in the next two years, Drive Shack appears to be counting heavily on a new golf entertainment experience – Urban Box – to maintain relevance, not mention its stock price, which closed on Dec. 6 at $3.70 share, not far from its 52-week low of $3.55 per share.
Drive Shack opened three of its core golf experiences in 2019 – in West Palm Beach, Raleigh, N.C., and Richmond, Va. The company opened its first location – in Orlando – in 2018. It plans to open a facility in New Orleans in 2020 and in Chicago in 2021.
The Urban Box focus, according to new Drive Shack Chief Executive Officer Hana Khouri, will be to provide a “social and tech-enhanced’’ mini-golf experience with “exceptional’’ food and beverage. Khouri, a former executive at Drive Shack rival Topgolf, was named company CEO this past summer.
“We are taking the same expertise we’ve used to develop our core stores and are applying it to smaller indoor locations across more than 50 potential markets in the United States,’’ Khouri said. “These are ideal for densely populated and highly trafficked urban locations, where one of our core stores would not fit.
“We are taking the same expertise we’ve used to develop our core stores and applying it to smaller indoor locations across more than 50 potential markets in the United States. These are ideal for densely populated and highly trafficked urban locations, where one of our core stores would not fit.’’
Khouri said Drive Shack is “working towards’’ opening three Urban Box venues by the end of 2020.
“The Urban Box will significantly increase our store growth potential due to the vast availability of retail space, shorter development time lines and less capital risk,’’ she said. “We have really focused on four key deliverables as it pertains to the Urban Box, all of which are underway. First, we needed to identify and secure technology for ball tracking and automatic scoring. Second, we wanted to get our architects and course designers identified and focus on helping to determine the venue format, layout and vibe. Third, we needed to identify potential real estate and to create test fits. And lastly, we wanted to select a name and get started on the trademark registration process.
“All four of these are well underway, and we expect to have three venues open by the end of next year.’’
But can they help stop the bleeding?