NIKE to exit golf equipment business (will continue making shoes, clothing)

[mountaineer]

Reuters
Business  |  Wed Aug 3, 2016 7:01pm EDT
Nike to exit golf equipment business

 
Nike Inc (NKE.N), the world's biggest sportswear maker, said it would stop selling golf equipment, including clubs, golf balls and bags.

The company, which built its golf business on the success of golfer Tiger Woods, said it would instead accelerate innovation in its golf footwear and apparel business and on partnering with more golfers.

Nike did not give a timeline for the planned exit.

The company is the second major sporting goods maker reviewing its golf business.

Adidas (ADSGn.DE) said in May it would sell the bulk of its loss-making golf business, hurt by waning interest in the sport, especially in the United States.

The number of people playing golf in the United States has fallen sharply after peaking in 2000, when Tiger Woods was in his prime.
 
For Nike, the problem is particularly acute.

A Nike-sponsored golfer hasn't won a major golf tournament in the prior eight championships, according to ESPN.
 
Nike is also facing stiff competition from smaller domestic rival Under Armour Inc (UA.N), which has successfully lured top sports personalities to endorse its brands.

Jordan Spieth, last year's no.1 ranked golfer, endorses Under Armour.

Sales in the golf business fell 8 percent to $706 million in Nike's latest financial year ended May 31. It is one of the company's smallest businesses, contributing about 3 percent to its total revenue.

[mountaineer]

Nike to exit golf equipment business
By Will Gray
August 3, 2016, 5:33 pm
Golf Central blog   

Nike Golf announced Wednesday that it plans to "transition out" of golf equipment, instead focusing solely on its footwear and apparel business.

No specified timetable for the transition was announced. The decision means that Nike will soon stop producing clubs, balls and golf bags.

"We're committed to being the undisputed leader in golf footwear and apparel," Nike brand president Trevor Edwards said in a statement. "We will achieve this by investing in performance innovation for athletes and delivering sustainable profitable growth for Nike Golf."

Nike made a notable splash in the golf industry when it signed a young Tiger Woods to an equipment and apparel contract in 1996. It has grown as a golf brand since, notably signing Rory McIlroy to a 10-year deal in 2013 worth a reported $200 million.

McIlroy's win at the 2014 PGA Championship remains the most recent major title for a player using Nike equipment.

Last month Nike announced that golf sales fell 8.2 percent to $706 million for the fiscal year that ended May 31, making it the lowest-performing business segment of the company over that time period. According to corporate filings, Nike Golf sales peaked in 2013, with revenues of $792 million.

While Woods has been the brand's most notable representative for the past two decades, he hasn't hit a competitive shot in nearly a year while recovering from multiple back procedures. According to Woods' agent, Mark Steinberg, plans are already underway to find Woods' next equipment provider for his eventual return to competition.

"Clearly he and I need to be thinking about a change on the hard goods side," Steinberg told GolfChannel.com. "He and I have discussed at length the plan for that, and feel comfortable with what we're going to do going forward. But clearly there's likely going to be a change."

In addition to Woods and McIlroy, other notable pros currently using Nike equipment include Michelle Wie, Suzann Pettersen, Brooks Koepka, Tony Finau, Russell Henley, Paul Casey and Jhonattan Vegas.

[mountaineer]

Several years ago, Nike honchos decided they wanted to get into the ice hockey market, so they bought Bauer and slapped the swoosh on Bauer equipment. When they decided to sell golf balls, they had Bridgestone manufacture balls, on which they slapped swooshes.

While it's true that some golfers won with Nike clubs, I've read that even Nike equipment reps admitted the clubs sold to the general public were far inferior to what the professionals used. Amateurs and hackers preferred other brands. Along with the reported decline in the interest in golf, it almost was inevitable.

As an aside, I recently read Phil Knight's autobiography "Shoe Dog," which tells how he founded NIKE. It would make good reading for anyone with entrepreneurial dreams.

[sinkspur]

When Elin Nordegan took a Nike club to Tiger's head back in December 2009,  the sport of golf began a precipitous decline.

Woods is now being held together by pins in his back, will never win another major and may never win another tournament, period.  He's done, in other words.

And so, pretty much, is amateur golf.

[mountaineer]

All of the stories on Nike's exit from golf equipment frantically ponder what kind of clubs Tiger will use in future. I doubt he'll ever again compete, so does it really matter? 

[ABX]

I wonder who they will sell their designs and patents to (or hold them for future value)? 
They made immensely good clubs, probably the best driver I've ever used (and still use)- even better than the infamous Big Bertha.  I have a mix in my bag of Nike and Callaway- Nike for woods and drivers, Callaway for irons.