The German sportswear maker has started talks to dispose of its TaylorMade and Adams golf club brands, and will also seek a buyer for its Ashworth clothing lines. It will keep its Adidas-branded golf shoe and apparel lines.
Adidas AG is starting talks with potential buyers for the bulk of its golf unit, abandoning a business it’s had for nearly 20 years but which is dragging on profitability, Bloomberg.com reported.
In addition to TaylorMade, the German sportswear maker will also seek a buyer for Adams golf clubs, as well as for Ashworth polos and cardigans, the company said. After a nine-month strategic review, it has decided to keep Adidas-branded golf shoes and clothing, which account for about 40 percent of the unit, Bloomberg.com reported.
First-quarter sales for Adidas’ golf unit fell 1.7 percent to 275 million euros ($316 million), Bloomberg.com reported.
The businesses that are being put up for sale could fetch 470 million euros, John Guy, an analyst at MainFirst Bank AG, told Bloomberg.com.
Adidas got into golf when it bought French ski and skate company Salomon in 1997. It acquired Ashworth in 2008 (http://clubandresortbusiness.com/2008/10/14/taylormade-adidas-golf-company-to-acquire-ashworth/)
Sales for Adidas’ golf unit plummeted 13 percent last year, and outgoing Chief Executive Officer Herbert Hainer is cleaning up Adidas’s operations as he sets the table for Kasper Rorsted, who takes the reins in October, Bloomberg.com reported.
‘‘The golf market is not growing at the moment, but it’s also not falling further,” Hainer said during a call with reporters.
“TaylorMade is a very viable business,” Hainer added. “However, we decided that now is the time to focus even more on our core strength in the athletic footwear and apparel market. The planned divestiture will allow us to reduce complexity and focus our efforts on those areas of our business that offer the highest return.”
The company hired Guggenheim Partners LLC last year to look at options for the business, Bloomberg.com reported. Golf equipment may have posted a nearly 100 million-euro loss for the company last year, analyst Guy estimated. That’s prompted a renewed focus by Adidas on its most successful sports: soccer, running and gym training. Soccer-related sales were up 25 percent in the first quarter.
Adidas also won’t sell its CCM hockey equipment business, Hainer said, a move it had considered.