adidas Golf Selling Off Golf Brands?

I wont pretend to be well educated about this stuff. But I would ask, is money being lost or is it really just that there is less being earned vs previous years? Corporations sometimes report a loss of (for example) 1/2 billion dollars when in reality they simply brought in 1/2 billion less than last year but in the end was still profitable. I don't ask this as a sarcastic remark but an honest question.

Is adidas and (as been brought up) also TM in general losing or simply not making the same?
 
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Interesting discussion here. I'm not up on all the financial side. But I'd like to see Adidas put in a real golf leader at TMAG who has a solid plan and give them a chance.

I know the last two seem to not have come up with a plan that works.

As for A&A I could definitely see them being sold off.

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As of today, I would be surprised if UA jumped in here. Their brand might be stronger than the ones they are acquiring honestly. Now my opinion might change in a few months, but it would seem like a bad beat for UA to take them on with their brand so strong.

This was my thought. A step backwards right now. And if they go into hard goods, it will be either solo or with a very strong company


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Working for a division of Nike for 6 plus years. These moves come down to money. When I was at Nike they sold off a few brands because there upside wasn't high enough.

I see Adidas selling off Adams and Ashworth because they do not drive volume and do nothing to complaiment Adidas Golf or Taylormade. The Germans who run Adudas have a hard on trying to catch Nike, so selling off Taylormade DOesn't make much sense. Adidas golf needs to get back to basics and focus on what they do best. When they where number 1 in golf they lost there drive. So the other brands worked harder and evolved beyond Adidas Golf. Today, Adidas golf is looking up at there competition.
 
CNBC is reporting that Adidas is meeting with banks to determine the value of the Taylormade brand and its potential selling price.
 
Saw this today http://www.benchmarkmonitor.com/adi...yy-in-full-swing-to-revive-taylormade/187191/ in which I thought this was the interesting part of the article:
"Adidas states that the improvement strategies for TaylorMade will primarily focus on “pricing, promotion and trade patterns as well as optimizing the supply chain and product costs”.
Adidas also intends to give specific attention to its Adams and Ashworth brands as a part of the new improvement plan.
An investment bank has also been employed to facilitate and consider opportunities for the declining golf business."
It makes it sound like they are going to put more effort into Ashworth and Adams, not spin them off. I would speculate that effort would be to enhance the marketability of eventually selling off all 3 brands as a package instead of individually.
 
Saw this today http://www.benchmarkmonitor.com/adi...yy-in-full-swing-to-revive-taylormade/187191/ in which I thought this was the interesting part of the article:
"Adidas states that the improvement strategies for TaylorMade will primarily focus on “pricing, promotion and trade patterns as well as optimizing the supply chain and product costs”.
Adidas also intends to give specific attention to its Adams and Ashworth brands as a part of the new improvement plan.
An investment bank has also been employed to facilitate and consider opportunities for the declining golf business."
It makes it sound like they are going to put more effort into Ashworth and Adams, not spin them off. I would speculate that effort would be to enhance the marketability of eventually selling off all 3 brands as a package instead of individually.

I read the Adams and Ashworth piece completely different. My take is that are looking to see if they are or could be accretive to the business and if so can improved margins or EBITDA performance be sustained at goal levels. They are likely called out because they are redundant to other elements of the business and could be a prime place for monetization and expense release.
 
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I keep seeing UA name thrown into making clubs. Let me ask this cause I haven't seen it asked. Why would they want to make clubs? Just outfit the best players in the world in all sports and sell clothes. Case in point my son went back to school yesterday. 7 out of 10 kids you seen in first day of school pics had something UA on. In my office I would say 5 out of 20 men here have a UA shirt on. So why would they want to take on that risk?

No takers on why UA would even consider buying to get in the club market
 
No takers on why UA would even consider buying to get in the club market
Growth. Opportunity. Jordan Spieth. Dallas, Texas.

Just a couple reasons.

And probably more why they wouldn't.
 
Growth. Opportunity. Jordan Spieth. Dallas, Texas.

Only growth if he and others play their clubs. Nike got Tiger to do the same and while I am sure Nike does well with clubs they are not at the top of most peoples lists. I would put them 6th probably behind Callaway, TM, Ping, Cleveland/Srixon and Cobra. Infact our local shop carries very little of them because they say they just flat don't sell to the masses.
 
No takers on why UA would even consider buying to get in the club market

I don't think it makes much sense. Selling clubs is not an easy way to generate profit. They should contine to focus on their strengths and stay out of clubs IMO.
 
Only growth if he and others play their clubs. Nike got Tiger to do the same and while I am sure Nike does well with clubs they are not at the top of most peoples lists. I would put them 6th probably behind Callaway, TM, Ping, Cleveland/Srixon and Cobra. Infact our local shop carries very little of them because they say they just flat don't sell to the masses.

Huh? Who are you even talking about?
 
I don't think it makes much sense. Selling clubs is not an easy way to generate profit. They should contine to focus on their strengths and stay out of clubs IMO.

Money is bigger margin wise in apparel, not clubs
 
I don't think it makes much sense. Selling clubs is not an easy way to generate profit. They should contine to focus on their strengths and stay out of clubs IMO.

Consider this as well. UA has overtaken adidas for soft goods. Adding hard goods with a different name does not make much sense (right now). Better off licensing the UA name to a company to produce a hard goods line if they choose to jump in.
 
Huh? Who are you even talking about?

I was comparing UA/Spieth to Nike/Tiger and how a clothing line tried using a pro to push clubs and get in the market. They do well but aren't near the top
 
Consider this as well. UA has overtaken adidas for soft goods. Adding hard goods with a different name does not make much sense (right now). Better off licensing the UA name to a company to produce a hard goods line if they choose to jump in.

Exactly, a deal like that with a lot of cash up front to use the UA name and Spieth on board to play those clubs is the only way it makes sense.
 
Its going to to a company bigger than $3B a year in revenues (UA in 2014) to gobble up Taylormade. UA only has a $650M credit facility and $500M in cash so odds are they would have to take on quite a bit of debt to make this happen which just isnt worth it when their margins currently avg 50%
 
Only growth if he and others play their clubs. Nike got Tiger to do the same and while I am sure Nike does well with clubs they are not at the top of most peoples lists. I would put them 6th probably behind Callaway, TM, Ping, Cleveland/Srixon and Cobra. Infact our local shop carries very little of them because they say they just flat don't sell to the masses.

Should also be noted though that generally Nike wants to be exclusive within a shop or have a very high percentage of a shop be their products. Not always the case, but generally speaking that is how they work within Pro shops from my understanding.

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I was comparing UA/Spieth to Nike/Tiger and how a clothing line tried using a pro to push clubs and get in the market. They do well but aren't near the top
But if they were to acquire Adams or even Taylormade, boom. You're in. And this is all entirely speculation. And UA may not be big enough to take on Taylormade.
 
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Just throwing this out there, probably wild and crazy. But does Bob Parsons have the means to purchase Adams or TMAG? Or get the financing to do so? Not saying it even makes since with him having launched his own line, but just a wild thought.
 
Under Armour has said they aren't interested in getting in the golf equipment industry. They are citing the experience of watching Nike try to break through and how much money Nike had to pump into that department. On top of that they also have said they aren't terribly interested in acquiring an existing company as the margins just don't jump out as terribly exciting. Now with that said that info is from a couple years ago before Spieth really hit the scene. Personally I Don't like how Adidas acquired companies then just kept those companies names out there. I much prefer how Nike went all in and how their golfers are out there without a million patches, just swooshes throughout their gear. I like that UA golfers also don't have patches all over.
 
I think this is so much simpler than everything I am reading. Adidas Group bought Taylor Made and funded it very well. Perhaps too well. Mark King took it to levels they had never seen and could not sustain. I assume the drain on the club side is hurting them. Adidas understands footwear and apparel. Just time to sell an asset. Should have sold it before the product started backing up on itself. I wonder who will buy it. I doubt it's UA. They tend to learn from others mistakes.


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I was skeptical of Adidas purchasing TaylorMade back when it happened, but I thought it was working fine. Then, as of the last few years with how TM has started to change for the not so great, I guess I was sort of right. I really hope they don't sell off TM, but if they do that might be the worst thing for golf in a long time. If they don't sell to the right company or investors, TM might be heading in an even WORSE direction. They are good for golf, I'd hate to see them golf.
 
No takers on why UA would even consider buying to get in the club market

i would venture a guess that Nike made more profit from the Tiger Woods line of apparel at his peak than they made from golf clubs. That's why I understand UA not jumping into the equipment business.
 
It will be interesting to see what impact all of this has on Mark King, now President of Adidas North America. After all he is the one most responsible for TMAG's huge rise and perhaps its departure from the Adidas family.Perhaps he will go wherever Taylor Made goes.
 
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