Adidas hangs a ‘for sale’ sign on golf business

Adidas made the announcement on Thursday as deteriorating golf sales overshadowed otherwise positive second-quarter results.

“Reebok has positioned itself well in the training market but the difficulty is that once you’ve lost that must retail real estate it’s really hard to get it back so it will be a long road for them but it certainly doable”, said Powell.

Adidas spokesman Runau said the company expects the review to focus on the smaller brands first it considers non-core, namely Ashworth apparel and Adams Golf clubs and brands.

Adidas revealed the possible sale of its golf business, which includes the TaylorMade, Salomon, Ashworth and Adams brands, as it battles against the sport’s declining popularity.

Bought in 1997, TaylorMade rode the surge in interest in golf that accompanied Tiger Woods at the peak of his playing career in the early 2000s, but has struggled in recent years as players numbers in the US have shrunk dramatically.

While Adidas Group seems to be making good on its turnaround plans for Reebok, once-beleaguered CEO Herbert Hainer has signaled that he’s ready to shed the company’s faltering golf division after it posted a significant slide yet again in Q2.

Net profit lagged behind a bit, with a 10.5 % increase to 385 million euro, which was partially because its gross sales margin dropped 0.4 % to 48.8 %.

In currency-neutral terms, second-quarter sales in North America were flat, while jumping 19% in greater China and plunging 14% in Russian Federation.

Adidas has already overhauled top management at the golf business, including appointing David Abeles as its new chief executive in March, and launched a restructuring programme past year.

Late Wednesday, Adidas announced it would be buying Austrian developer and manufacturer of fitness and health applications and hardware Runtastic GmbH for about 220 million.

“The outcome will and has to be a more nimble and profitable golf company”, he said. The company described the sales increase as “robust” given World Cup sales in last year’s second quarter. Nike Inc., Adidas’s main competitor, reported a 13% currency- adjusted sales growth in the three months ended May 31.