In 2012 while the rest of the industry was in a down turn, TaylorMade Golf reported record sales including a first quarter that was up 32% from the year prior. Shocking numbers coming directly after the entire year of 2011 showed a growth of 20% bringing the company to $1.4 billion and the largest golf company in the world.
Was it more shocking that this company was having such huge success after bucking the trend by changing the color of their metal woods or was it more shocking that the success was coming in such a down market? A look at some of the numbers for companies in 2011 show an industry that was struggling. Callaway Golf sales were down nearly 8% and Nike Golf sales were down 4%, a larger drop than the previous year. Reports were everywhere that the number of golfers had been shrinking and yet while all this was happening, TaylorMade Golf was reporting incredible numbers. In early 2011, TaylorMade Golf owned nearly 30% of the metal woods market, one of the major prized possessions in the golf business. By the end of the 1st quarter in 2012, that number increased to over 50%, a number many thought would never be obtained.
So what happened? Since that time quite a few changes have taken place and when you are number one, that has to be expected. Some of the talent that assisted in bringing the company these huge growths both in research and development and marketing moved on to other companies. The world of golf has not brought back some of the golfers it failed to keep. The weather has not cooperated in the least and finally, disposable income has gone away for many that loved the game. All of that adds up to many reasons that say what they were doing just 2-4 years ago was absolutely staggering in the world of business. Yet some would say after recent reports that the walls might be crumbling a bit and there is talk of some restructuring taking place.
In the middle of 2014, TaylorMade Golf sales are down double digits for the second straight quarter. Is that the fault of the items listed above? Possibly. However based on the recent reports from major retailers, the issue might be deeper than that and involve inventory management and more importantly, the inventory of previous models. SLDR has been the #1 driver sold for quite some time in the premium market commanding a $400 price tag. However the second model for TaylorMade Golf released earlier this year had issues gaining traction. The JetSpeed was marketed numerous ways, including the commercials that featured the puppet tour staff as the Speed Police. The driver was not the instant success that many of their 2nd tier products had been such as Burner and RBZ and was discounted heavily rather quickly.
With a company structure some say is built around the inflated numbers at their peak, what can be done outside of restructuring? Which sadly is another word for cutting costs and people losing their jobs. With their hands forced in some ways based on past inventory, but still having the #1 driver on tour, and in retail, could this be a sign of a slow down in release schedules by them for the time being? Those on the internet are quick to point out that the release schedule is what has caused this, and that may not be the case. Especially considering the sales behind the premium SLDR driver at $400. Inventory managment might be a better way to describe it and when each line comes with the rest of the metal wood family and those do not go over as well in sales at the retail level, the bump in the road becomes a major issue.
Smart people are at the helm and will get the company turned towards the right direction again, because frankly golf needs more companies producing high quality equipment, not less. However with the golf world exhausted of the doom and gloom reports that are seemingly coming out weekly about the lack of interest, it makes one wonder what the future holds. Great companies will continue to produce great products and push the envelope to give us the tools to enjoy the game more than ever.
What do you think? Will changes coming this month in the structure of TaylorMade Golf help rebound a company that has produced incredible numbers over the last few years as well as some top notch products? Discussion taking place in the comments below or in this thread on the THP Forum.
I think the introduction/success of their next non-premium line will be something worth watching. How it will be marketed, how it will be handled on the retail side. My guess is that they are going to have to really knock that one out of the park to stop the leaking and that could be difficult with what they’ve done these last few release cycles.
I think this is just the beginning of a few very difficult years for the company. They’ll reamin strong in some areas, but I think the white club bubble has burst and don’t see them regaining that type of dominance going forward.
We’ll see a smaller Taylormade for sure and hopefully they come out better for it long term.
I think they just completely dropped the ball during the current release cycle with SLDR & Jetspeed. They rested on their laurels & got complacent. Throw in Callaway & Cobra offering options in the market that were superior to theirs & the financial troubles you see now are present. Inventory does play a huge factor here, but so does disposable income. When there is very little, you can’t throw out inferior products & expect to sell.
Great article, Josh. Really does a great job of summing up the main issues that TaylorMade is dealing with. IMO TaylorMade’s expectations of their consumers got a little bit unreasonable after the huge couple years they had, but I know many will disagree.
Very well written piece. While I do not have the mind to understand what to do from here I do agree that there is a glut of product in the market from Taylor Made and others. It all adds up to short term value to the consumer and a need to right the ship and re-create a healthier product environment.
Best article I have read on the subject to date. I am a big fan of the adidas Taylormade brand and continue to support them. Love their customer service and their equipment. I do not believe it is a release issue, as evident by them being at the top of the game so to speak, with the same cycle.
Bloated staff is likely part of the issue and we saw this with Callaway Golf previously. Clearly they have righted the ship and are on track and partly to “blame” for the woes of adidas. Callaway marketing as been stronger across the board all year long.
Good article with lots of great info. I like the positive tone taken compared to the garbage negativity I always read elsewhere. You are right, we need more companies, not less. I would sit back and rest on the success of the sldr line right now and continue that through the January rush and push back all releases. It is still number one and that may not change. Market it as we released something so good, it does not need a replacement.
Then the time comes and retailers are caught up, drop the next big thing which I am sure is in the works already.
Taylormade was like Apple in that they were the biggest on the block and others caught up. Less about equipment and more about the marketing. Since that time the marketing has gone stale a bit, and their previews and releases are to blame. Their social media is the worst outside of Nike in the world of golf and the promises of 17 yards plus 10 more do not fly with the consumer that is getting more and more educated.
Great article and the best I have read on the subject all year.
Awesome piece. I agree with most but still think they put out too many drivers compared to others. Great insight into the happenings around the industry.
James,
Thanks for the comment. The truth is, others have put out just as many clubs. You wont hear anybody complain about Mizuno putting out so many iron sets, or Ping putting out G line, I line, S line, Anser line, etc. Being the top dog has its place and my gut tells me one of those places is the criticism of release schedules.
More golf gear for us fanatics is a good thing as long as the shops and environment can support the lines.
Best info yet. I’m rooting for them. New CEO has some work to do. Marketing and social media need to be better too.
They got caught by the ‘little’ guys. I can think of a few sets of irons I’d game in a heartbeat that aren’t TM. Being at several events with THPers and hitting the vast arsenal of clubs out there, I can say I could easily pick 3 of each type of club out there that isn’t TM, and still be extremely satisfied. I was quite surprised by the BIO Cell line (hybo and Drvr). Or you could choose the XTD driver, or the M3 line of irons from W/S. GREAT equipment.
I just don’t see them as the go-to anymore. When I first started, I played 1200LTs, then moved to a used set of Cobras. I was pumped when I could finally get some 2.0s and then R11s. Since then, I hardly think of them because everyone else is just that good.
Yes, I have a bag full of Callaway gear. It’s awesome stuff and I’d hate to see it go. BUT…. If you told me I had to give it up and switch to another OEM (not named TM), it honestly wouldn’t scare me that much. I’ve hit enough “other” OEM stuff to know I’d still be able to play my game.
some good insight into the TM marketplace here.
it’s interesting to see, as you say, “a struggle at the top” when most would consider them the most popular equipment manufacturer for quite some time now…
The next steps that TM takes IMO are massive not only for them, but the rest of the industry as well. The pushing of mass inventory to big box stores who never stood a chance of selling it all in turn creating a massive backlog reeks of complete mismanagement.
Add in the bomb that was the Jetspeed line, which felt rushed from the start, and you end up reeling a bit. The big thing for what happens form here for them is what is next, how do you regroup and attack this. To me this is both internal, external, and from a design and marketing standpoint.
Its going to be a wild last half of the year IMO.
Loved the piece. It has great insight and I’m not sure what the solution is but I hope it gets fixed. I believe callaway and Nike have both had increases over the last year and a half in metal woods and TM is down.
Great article Josh, I do hear all of the gloom & doom reports about the state of golf regularly and have wondered about the ripple effect it is having throughout the industry.
I really hope TMaG can turn it back around or at least stop the leaking because as you said, “frankly golf needs more companies producing high quality equipment, not less.”
Love columns like this. To answer the question I think callaway along with jetspeed are the issues. Like you I hope they fix it.
Big fan of rbz fairway and I did get the 17 yards they talked about. Stage 2 came out and gave us 10 more yards they said which I never saw. Then r1 and then sldr and then jetspeed and then sldrs. All quality but for me as an amateur each release got less forgiving.
Then add that all the other companies talk on Facebook and Twitter and with them I get nothing other than when they have a guy winning.
Step up like others, make marketing consistent and they return.
I believe a few people made this exact prediction last year. You can’t move up a release by 5 months or so when all that inventory was sitting I stores still from sRBZ stage 2 and r1 and even r11s. Then drop that Jetspeed on retail and then literally drop it in 3 months.
Complete disaster and their marketing and social media dept should be the first to go.