TaylorMade Woes

[SkiBumGolfer]

I honestly just think that it's a case of TM sitting back on their laurels a little bit as far as their non-marquee lines go, as well as totally changing their technology message over the last few years and then pretty much changing it back again. That and the willingness to produce and sell to retailers massive amounts of inventory on the assumption that people will buy it, which totally ignores the much stiffer competition they are facing these days in the metalwood market. I think they are going to take a big hit financially, but the bigger hit will be in their reputation - as their inventory hits bargain basement prices while retailers try to unload it, AND people start seeing a perceived tech "decline" (adjustable to non-adjustable, for example), no one will be willing to pay full price for TM woods anymore. They need to pull a Callaway ASAP and get themselves firmly back in the premium area of the customer's mind.

FWIW though, I think they are absolutely killing it in the iron sector right now. Their lineup is one of the best in golf right now, IMO.

 

[fupresti]

I almost feel like the SLDRs was an attempt to mitigate excess SLDR inventory, freeing up the ability to wipe the SLDR from the market completely when its replacement is announced. Other then the adustable hosel and a paint job, its the same. What better way to increase margins them to use existing inventory? Maybe the SLDRs is their answer to the excess issues of the RBZ, Stage2 and JetSpeed issues?

 

[TeedUpThoughts]

Interesting financial notes from Adidas. Corporate restructuring mentioned in there, so expect to see TM laying off a chunk of middle managers in the near future. Curious to see what they might sell off to decrease overhead besides that, perhaps consolidation of facilities?

TM seemed to be at the forefront of trying to grow golf (at least in conversation) at the last PGA event, what if they took a significant portion of the "outdated" inventory to secondary retailers (i.e Walmart, Target, discount chains). I think if priced right they could move a lot of product with slimmer margins and avoid a total loss while providing high quality (for newcomers to the game, or casual players) gear at a palatable price that will introduce them (the consumer) to TM and perhaps produce future top line sales and brand loyalty.

 

[GolfFest]

I almost feel like the SLDRs was an attempt to mitigate excess SLDR inventory, freeing up the ability to wipe the SLDR from the market completely when its replacement is announced. Other then the adustable hosel and a paint job, its the same. What better way to increase margins them to use existing inventory? Maybe the SLDRs is their answer to the excess issues of the RBZ, Stage2 and JetSpeed issues?

I'm not sure I follow how this works. With the SLDRs don't they have to create new inventory? While very similar it is a different head they have to manufacture.

 

[adamw238]

I skimmed through this, but how much of the resale market (ebay etc) is impacting the liquidation of older inventory?


And you guys are bad for the DJ comments.....lol

 

[T0AD]

I did not want to paste in the whole article but the headline below paints a picture that tough times are ahead for the golf business at least in hard goods. At least it may provide some values to the consumer.It may also stop some of these companies from producing more product than they market can bear.

I stopped right after this sentence and didn't even read any replies, so if I've been ninja'd, sorry.

THAT, I think, is the biggest problem. I really, seriously, have NO idea how much product the other OEMs put out, but I'm betting TMAG goes balls-out and produces tons thinking they can sell off name recognition alone.
Too many great, great products are coming out now from the other 'top 10' manufacturer's to be that arrogant.

OK, now I'll go back and catch up. I feel like doing things backwards today.

 

[adwillingham]

I think a lot of the things in this thread have been interesting to read and ponder. The inventory issue made me think back to something that Callaway and Odyssey have done this year, with both the Bertha line as well as the Metal X Milled Putter line, where they have stated up front that the number produced would be lessened, and in the case of Bertha saying that the cost would stay the same until they essentially pulled in (granted they dropped the Alpha pricing), and in the case of MXM saying it was a limited quantity, and when they were gone there would be no more.

The cynic in me also read these posts and really wondered if the "Grow the Game" initiatives TaylorMade was backing so hard in February were really not much more than a cheap marketing ploy for stuff they weren't selling well. I know more customers would technically raise all ships, but it was interesting to see that other companies really didn't jump in to back them up at all.

 

[Brianbigoats]

I almost feel like the SLDRs was an attempt to mitigate excess SLDR inventory, freeing up the ability to wipe the SLDR from the market completely when its replacement is announced. Other then the adustable hosel and a paint job, its the same. What better way to increase margins them to use existing inventory? Maybe the SLDRs is their answer to the excess issues of the RBZ, Stage2 and JetSpeed issues?

The heads would be diffrent due to the removal of the Adjustment so they are new castings not excess stock

 

[Hawk]

I think a lot of the things in this thread have been interesting to read and ponder. The inventory issue made me think back to something that Callaway and Odyssey have done this year, with both the Bertha line as well as the Metal X Milled Putter line, where they have stated up front that the number produced would be lessened, and in the case of Bertha saying that the cost would stay the same until they essentially pulled in (granted they dropped the Alpha pricing), and in the case of MXM saying it was a limited quantity, and when they were gone there would be no more.

The cynic in me also read these posts and really wondered if the "Grow the Game" initiatives TaylorMade was backing so hard in February were really not much more than a cheap marketing ploy for stuff they weren't selling well. I know more customers would technically raise all ships, but it was interesting to see that other companies really didn't jump in to back them up at all.

I do think HackGolf was a reaction to the environment they created for themselves for sure.

 

[annsguy]

Toad, I hope my comments did not cause you or anyone else any stress. I simply sent out some info I saw in a sporting goods industry blog I follow.My simplistic guess is that some companies were trying to stay up with the pace that Taylor Made was setting and the result is a whole lot of product. A lot of it by the way is very good.It just may be that the supply is bigger than the demand.

I stopped right after this sentence and didn't even read any replies, so if I've been ninja'd, sorry.

THAT, I think, is the biggest problem. I really, seriously, have NO idea how much product the other OEMs put out, but I'm betting TMAG goes balls-out and produces tons thinking they can sell off name recognition alone.
Too many great, great products are coming out now from the other 'top 10' manufacturer's to be that arrogant.

OK, now I'll go back and catch up. I feel like doing things backwards today.

 

[T0AD]

. Couple that with other OEM's (Callaway & Cobra) just killing it .

Those were the first two OEMs that came to my mind, too.

When the less affluent customer can buy the technology for 1/5 the original price a year after it is released thats what they will do.

That's how I usually roll. I bit on the AMP Cell irons at full retail and two months later they were 50% off and there was no way to recoup anything on them when I got my Apex set.

For those that actually pay attention to this stuff, just look at the progression.

-A few years prior we had the light/long thing with the off line - Superfast and 2.0. Both successful,

The 2.0 and R11 irons were my last positive image of them. I just knew too many people going through too much TM stuff to think it was all that good; because if it was, they'd have kept it.
I tried the Superfast driver and hated it. So did the guy I sold it to. The only thing of theirs that has me intrigued, and that's because of this place and some price drops, is the R1 and the new irons.

This would be like closing down Ford or GM, for the golf industry.

I wouldn't put too much in GM right now after they recalled like every car they rolled off the line in the last four years. Geez, people, you used to be the best!

edit: Oh, and EFF HACKGOLF and TMs stupid insane 15" hole.

 

[Bog33y]

I wonder how this will affect Adams...

 

[emart2173]

I heard on CNBC yesterday that Adidas golf apparel sales are down and losing to Puma and Nike.

 

[rjb01camaross]

I wish the new CEO the best of luck turning things around. I know for me I hope they go back to their roots and bring back a their old copper color (think Ti Bubble 2) with updated tech. It will prob never happen but it could help them reconnect with old customers they have lost through the years.

 

[Hackerx2]

The key is....sell high quality/high performance products and slow the sale of new development releases.

 

[Nixhex524]

I don't follow this stuff that closely until it hits the pages here, so I have to say I am surprised to a point. With the way TM markets, they have me believing they are killing it in the golf industry even though my mind tells me that with the amount of different lines and different technologies they claim to work over the last couple years, it was only a matter of time before there was some backlash. Saturation may not be the sole reason for their woes, but it definitely has to be a factor. I have given up trying to follow what they are releasing and how it is different from the last product. I wish them luck, but I do hope they do things differently moving forward.

 

[ArmyGolf]

Its crazy to think that as unforgiving as the SLDR is, its not the reason for Taylormades troubles.
R1 should have been carried forward as an alternativebto the 'low and forward' movement and Jetspeed should never have happened.

 

[BigTex]

K

Just reeks of hubris and poor planning to me.

Yeah reminds me of the real estate market in Texas during the 1980s. Over optimistic projections for demand based on extrapolated trends that showed unsustainable growth. This led to a level of new supply of inventory the far exceeded the actual demand. It took several years and significant price reductions to get the level of inventory to match the actual level of demand. Once it did, prices were able to stabilize, the market and supply began to grow again, albeit at more reasonable levels and with greater controls on the new inventory to meet the new demand.

There does seem to be a slowing level of growth, and maybe even a decline in golf equipment demand. But, it really appears to be more over optimistic sales projections by retailers combined with rapid product cycles by Taylormade. This was exacerbated by the weather in the first few months of the year. This created excess unsold inventory of older models even at reduced prices, even though I recall there actually being a slight increase in units sold. Taylormade is probably also being affected by other manufacturers getting some of the market share back they lost in the past few years. So they manufactured too many clubs for the inflated retailer expectations, which still has not been absorbed. If the retailers do not need more clubs, Taylormade cannot make them. In the mean time, the earnings from both take a beating.

Taylormade needs to adjust their production and the retailers need to adjust their inventory, which will take some time. Once that happens and they create the right product, the can return to more sustainable production levels, properly adjusted without expecting exponential growth in demand and market share. Once the oversupply is out of the way, everyone can get healthy again and grow at more realistic levels.

 

[emart2173]

The guy who runs the pro shop at the driving range near me says that TM has been one if their top selling drivers but also until recently with SLDR they have been near the top in returns/trade ins. There can only be so much truth in the +17 then +15. Guys would be hitting the ball 400 yds by now with all these distance added clubs. I have seen other forums where people get upset when TM comes out with a new release right after these guys bought the "latest and greatest"

 

[ScarletKnight92]

The guy who runs the pro shop at the driving range near me says that TM has been one if their top selling drivers but also until recently with SLDR they have been near the top in returns/trade ins. There can only be so much truth in the +17 then +15. Guys would be hitting the ball 400 yds by now with all these distance added clubs. I have seen other forums where people get upset when TM comes out with a new release right after these guys bought the "latest and greatest"

I for one am in total agreement with this statement. This is the real reason I cant justify buying their driver or the SLDR irons ive been eyeing down for some time. I feel the second i get them a new set is bound to pop out, screwing my resale and justification for a purchase. TM pumps out a few too many sets in a close time-frame. Leading me away from them to clubs like ping, cobra, titeliest.

 

[SirMike1983]

Why spend $500 for a club you know will be down to $350 in a few months? The saturation thing makes sense too. When the less affluent customer can buy the technology for 1/5 the original price a year after it is released thats what they will do. Others will think abut buying it for a month or two and wait for the first price drop.
Then there is the exclusivity factor. If you want to know how that works just head over to the Scotty Cameron Custom Shop. People will pay for one of a kind and custom equipment that not everyone has. If you put 10,000 of the same item on the shelf and start reducing prices to clear them out there is no more exclusivity. It's like GM's problems selling Corvettes in the early 80's. Prices were low enough they were affordable for a lot of people. When they brought out the 32 valve OHC V8 and raised the price to 6 digits they couldn't make enough of them suddenly, because not everyone could afford them.

Somebody has a mess to clean up now and a big marketing job to bring the brand back to better profitability.

For someone like me, exactly- it almost becomes like software/computers. If the development and replacement cycle gets faster, then products 1-2-3 steps out of current depreciate that much faster. I play almost exclusively second hand stuff, especially second hand stuff with low resale value because I can get it so cheaply and try many things with little risk. Moreover, the clubs that don't sell move that much faster down the chain to the budget resellers based in the US. In a tight economy, you're competing not just against other makers, but also against unsold clubs from the last generation or two, as well as against lightly used clubs in some cases. Some golfers will only play brand new, latest generation stuff, but some are fine buying a couple generations back unused (reseller items) and some are ok with gently used clubs.

 

[jitzy]

Here's where I think TMAG is stupid. Yesterday Sergio destroyed the putting greens with 11 one putts in a row with what appeared to be their new Balanced Putter. If I were them I would of tried to get a commercial out there today or at the very least bomb social media with this news. They would have sold a ton of putters today.

 

[blugold]

I may be different. But I never buy a club with resale in mind. It doesn't make sense to me.

 

[blugold]

Here's where I think TMAG is stupid. Yesterday Sergio destroyed the putting greens with 11 one putts in a row with what appeared to be their new Balanced Putter. If I were them I would of tried to get a commercial out there today or at the very least bomb social media with this news. They would have sold a ton of putters today.

I'm not sure Sergio is the kind of player that can make that happen. Sergio could have had 18 one putts in a Friday round at a non major and the public wouldn't have noticed.

 

[jitzy]

I'm not sure Sergio is the kind of player that can make that happen. Sergio could have had 18 one putts in a Friday round at a non major and the public wouldn't have noticed.

But thats just it, Sergio is starting to turn it around out there. Fans are starting to cheer and pull for him now and he's played his last 2 tournaments great. That performance was very UnSergio like and they could of capitalized on it.