adidas Golf Selling Off Golf Brands?

I thought they were doomed the day they were bought. It was seemingly a classic case of killing off a competitor and getting a couple of patents that you were about to infringe on.

Fwiw I could disagree with this more. Adams was about as much a competitor as noodle is to pro v1. There is talk and innuendo about patents and lawsuits but Adams had not been selling gear for a number of years and was being shopped. If there was infringement, there would have been legal talks immediately.
 
Adidas Out of the Golf Industry?

Adidas Out of the Golf Industry?

Adidas considers giving up golf as cycling booms
By Emma Thomasson and Jörn Poltz
4 hours ago

LONDON/MUNICH (Reuters) - German sportswear company Adidas has appointed investment bank Guggenheim Partners to help with the possible sale of its golf brands, which are struggling as the sport loses popularity, particularly in the United States.

Adidas made the announcement on Thursday as deteriorating golf sales overshadowed otherwise strong second-quarter results, boosted by double-digit sales growth in both western Europe and China, which it expects to continue for the rest of the year.

After peaking around 2000 when Tiger Woods was in his prime, the number of U.S. golfers has been steadily falling as fewer young people take up the sport and as busy professionals switch to cycling rather than spending the best part of a day playing 18 holes.

Adidas bought the TaylorMade brand in 1997 along with Salomon, developing it into the world's biggest golf supplier. It acquired the Ashworth brand in 2008 for $72.8 million and the Adams brand for $70 million four years later.

Investors have criticized Adidas for responding too slowly to the declining popularity of the sport, flooding the market with new products that it then had to discount heavily.

Golf sales fell to about 6 percent of sales in 2014, forcing the group to warn on profits several times, while Adidas is not a major player in the booming business for high-end bicyles.

Chief Executive Herbert Hainer admitted that two new golf clubs - the R15 and the AeroBurner drivers - had not sold well and competitors had been raising their game, but said he had high hopes for another new club which it will be launching soon.

He told reporters on a conference call that Adidas was initially looking into the possible sale of its smaller golf brands Adams and Ashworth, which have suffered most in the downturn, although it was considering all options for the main TaylorMade label for which it also announced a turnaround plan.

The number of people playing golf in the United States, which accounts for about half the global golf market, has fallen to an estimated 23 million from nearly 30 million in 2000, with the number of courses declining for the past eight years.

The Professional Golfers' Association (PGA) is trying to market the sport to youngsters and make the game more family-friendly and Hainer said the number of golf rounds played had reversed their downwards trend recently.

But that has yet to be reflected in sales of Adidas golf equipment. In the second quarter the firm's golf sales fell by a currency-adjusted 26 percent, accelerating a 9 percent decline in the previous three months.

Other companies in the golf market include Nike, Kering's Puma and Callaway Golf. The company formerly known as Fortune Brands sold its golf business in 2011 for $1.2 billion to a group led by Fila Korea and Korean private equity fund Mirae Asset Private Equity.

ROBUST MOMENTUM

Despite the slump in golf Adidas group sales rose in the last quarter by 15 percent to 3.91 billion euros ($4.27 billion) or 5 percent excluding the impact of currencies, beating an average of analysts' forecasts of 3.8 billion euros.

Adidas shares, which are up 31 percent this year helped by a stock buyback and improving sales, were up 0.8 percent at 1217 GMT, outperforming a flat German blue-chip index.

Hainer said he expected robust momentum to continue in the second half, citing a strong order book and "unprecedented" demand for Manchester United kit launched on Saturday after it displaced Nike as new suppliers to the English side.

He said the weak performance of the golf business would not put the group's 2015 targets at risk.

Adidas has already overhauled top management at the golf business and launched a restructuring program last year, but Hainer said a more radical overhaul of the business was needed, including a review of marketing and production and more cost cutting.

(Additional reporting by Martinne Geller; Editing by Balazs Koranyi and Greg Mahlich)

Linky
 
Nate: merged your thread with an existing one.
 
Now is the time to get out before this market cycle ends, we have 24 to 30 months tops before another recession hits and if they don't get out now they will be holding onto the asset for another 6 to 8 years.
 
I hope someone buys them and gives them a fair chance to be successful without all the terrible decisions surrounding them.
I'd love to see someone else take them to new heights, they have the potential for sure.
 
Adidas considers giving up golf as cycling booms
By Emma Thomasson and Jörn Poltz
4 hours ago

LONDON/MUNICH (Reuters) - German sportswear company Adidas has appointed investment bank Guggenheim Partners to help with the possible sale of its golf brands, which are struggling as the sport loses popularity, particularly in the United States.

Adidas made the announcement on Thursday as deteriorating golf sales overshadowed otherwise strong second-quarter results, boosted by double-digit sales growth in both western Europe and China, which it expects to continue for the rest of the year.

After peaking around 2000 when Tiger Woods was in his prime, the number of U.S. golfers has been steadily falling as fewer young people take up the sport and as busy professionals switch to cycling rather than spending the best part of a day playing 18 holes.

Adidas bought the TaylorMade brand in 1997 along with Salomon, developing it into the world's biggest golf supplier. It acquired the Ashworth brand in 2008 for $72.8 million and the Adams brand for $70 million four years later.

Investors have criticized Adidas for responding too slowly to the declining popularity of the sport, flooding the market with new products that it then had to discount heavily.

Golf sales fell to about 6 percent of sales in 2014, forcing the group to warn on profits several times, while Adidas is not a major player in the booming business for high-end bicyles.

Chief Executive Herbert Hainer admitted that two new golf clubs - the R15 and the AeroBurner drivers - had not sold well and competitors had been raising their game, but said he had high hopes for another new club which it will be launching soon.

He told reporters on a conference call that Adidas was initially looking into the possible sale of its smaller golf brands Adams and Ashworth, which have suffered most in the downturn, although it was considering all options for the main TaylorMade label for which it also announced a turnaround plan.

The number of people playing golf in the United States, which accounts for about half the global golf market, has fallen to an estimated 23 million from nearly 30 million in 2000, with the number of courses declining for the past eight years.

The Professional Golfers' Association (PGA) is trying to market the sport to youngsters and make the game more family-friendly and Hainer said the number of golf rounds played had reversed their downwards trend recently.

But that has yet to be reflected in sales of Adidas golf equipment. In the second quarter the firm's golf sales fell by a currency-adjusted 26 percent, accelerating a 9 percent decline in the previous three months.

Other companies in the golf market include Nike, Kering's Puma and Callaway Golf. The company formerly known as Fortune Brands sold its golf business in 2011 for $1.2 billion to a group led by Fila Korea and Korean private equity fund Mirae Asset Private Equity.

ROBUST MOMENTUM

Despite the slump in golf Adidas group sales rose in the last quarter by 15 percent to 3.91 billion euros ($4.27 billion) or 5 percent excluding the impact of currencies, beating an average of analysts' forecasts of 3.8 billion euros.

Adidas shares, which are up 31 percent this year helped by a stock buyback and improving sales, were up 0.8 percent at 1217 GMT, outperforming a flat German blue-chip index.

Hainer said he expected robust momentum to continue in the second half, citing a strong order book and "unprecedented" demand for Manchester United kit launched on Saturday after it displaced Nike as new suppliers to the English side.

He said the weak performance of the golf business would not put the group's 2015 targets at risk.

Adidas has already overhauled top management at the golf business and launched a restructuring program last year, but Hainer said a more radical overhaul of the business was needed, including a review of marketing and production and more cost cutting.

(Additional reporting by Martinne Geller; Editing by Balazs Koranyi and Greg Mahlich)

Linky

nuff said.... If I was a major Adidas stock holder I would be very happy if it is true what is written in the above article. Declining sales = declining returns on stock options = unhappy investors. Microsoft has bought out many companies that they felt were threatening (Netscape) and then buried them under their own brand. I can see possibly Callaway or Cobra buying TM and re badging the technology as their own as Callaway has already done with Hogan.

"It is nothing personal...it's only business."
 
I'm curious if the golf industry is a little on edge after hearing this news?
 
that article says golfers are dropping the game to pick up cycling. huh? is that true? sure, i see more cyclists than ever, but are they former golfers?
 
that article says golfers are dropping the game to pick up cycling. huh? is that true? sure, i see more cyclists than ever, but are they former golfers?

Cycling isn't cheaper then golf if you are serious, my buddy has $150K of bikes in his garage then thrown in a half dozen cycling trips a year and this is the same as going to WalMart to buy a Huffy
 
I just saw this. I think this is massive news. I imagine they will sell off or completely cut from the bottom up, but what do I know.
 
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?
 
that article says golfers are dropping the game to pick up cycling. huh? is that true? sure, i see more cyclists than ever, but are they former golfers?

The irony is that golf rounds are up last month.
 
Also TM hasn't exactly been the same since the last guy who ran it left. I cant remember his name but the did an undercover boss with him. He seemed to get out when the getting was good.
 
Adams will become a house brand for Golfsmith or Dicks or something.
I see Ashworth as pretty inconsequential.

How many company's actually have the money and ability to purchase a struggling giant like Taylormade?
Maybe Nike?

*cough* Under Armor *cough* *cough* Jordan Spieth *cough*
 
*cough* Under Armor *cough* *cough* Jordan Spieth *cough*

What does Under Armour get out of it? A low margin business that is falling behind? They already passed them in footwear (overall). I still remember when everybody said UA was buying Cobra. Then it was Titleist.
 
Time to bust out the game changer .

SLDR SC.


Sent from my iPhone using Tapatalk
 
I only see Under Armour getting involved in hard goods if they can get Spieth to play them and from what I understand he is intent on sticking with Titleist as his club sponsor.
 
What does Under Armour get out of it? A low margin business that is falling behind? They already passed them in footwear (overall). I still remember when everybody said UA was buying Cobra. Then it was Titleist.

Another Star to advertise? I was more saying that Under Armor has the money to buy Taylormade.


Honest question, I do not know if this is the place to answer it, but Nike is a similar company to Adidas and Under Armor. Does Nike take an annual loss from their golf department?
 
Another Star to advertise? I was more saying that Under Armor has the money to buy Taylormade.


Honest question, I do not know if this is the place to answer it, but Nike is a similar company to Adidas and Under Armor. Does Nike take an annual loss from their golf department?
Do they though? I don't have the numbers but isn't Taylormade like a 1.5 billion dollar company? And UA at 2.5? Seems like quite the leap. (Those numbers are pulled from thin air, loosely based on an article I read somewhere)

I still think a giant like Nike is the only kind of company that can afford that sort of risk, but even then I'm not sure what they gain from it. Top to bottom I think Nike makes better clubs at the moment.
 
The article I read quoted the CEO as saying the R15 and Aero aren't selling. Is that really true? I thought I read somewhere that TM was still the market share leader in drivers.
 
This makes me wonder about how we view golf companies. Until recently, TaylorMade was viewed perhaps as the top dog out there. Most THPers would say Callaway is coming out of this looking good, which is perhaps true. Ping seems to be very disciplined in their approach. Is top dog where you really want to be right now?
 
Hard to see UA buying Adidas golf assets. Private Equity seems like a better option.
 
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