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TaylorMade Sold

redseat

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Another power player has exited the golf equipment business, with Adidas announcing Wednesday it has agreed to sell its golf brands TaylorMade, Adams Golf and Ashworth to private equity firm KPS Capital Partners for $425 million.

Despite being loaded with stars on the course -- TaylorMade has Dustin Johnson, Jason Day, 2017 Masters winner Sergio Garcia and on Tuesday announced a long-term equipment deal with Rory McIlroy -- the retail golf equipment market has seriously suffered.

The brands' sale price is evidence of the fall of the golf equipment market. In 2012, Adidas golf brought in $1.7 billion in revenue. Four years later, total revenue was slightly above $500 million.

In August, Adidas' biggest competitor, Nike, decided to stop making golf equipment. A month later, nationwide golf retailer Golfsmith filed for bankruptcy.

Adidas will continue to use golfers to sell its clothing, as both Johnson and Garcia will continue to wear branded shoes and apparel. Day and McIlroy have shoe and apparel deals with Nike.

While the National Golf Foundation has cited recent positive signs -- first-time golfers reached a record high in 2016 (2.5 million) -- the sport has had a hard time retaining those who try it.

The fallout in the equipment business has its roots in the Great Recession, which resulted in companies and retailers discounting clubs in order to drive up purchases in a business where product turnover is part of the equation.

Adidas took over the TaylorMade brand in 1997 when it bought French equipment maker Salomon for $1.4 billion. The company bought Ashworth for $72.8 million in 2008 and Adams Golf in 2012 for $70 million.
 

Rex Racer

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The golf explosion that started 25 years ago has faded and this is nothing more than a market correction that has been brewing for a while. While we can certainly give Tiger woods a lot of credit for turning eyes towards the game and helping it grow the growth started before he hit the scene and golf courses started popping up everywhere. Equipment manufacturers developed new technologies that allowed weekend duffers to hit the ball as far as the pros of the 60's did and they were able to charge outlandish prices for them. Greens fees at many CC's got out of hand as well.

To compound the problem most people who took up the game quickly realized that it is not as easy as it looks on the telly. So most folks bought equipment, played sporadically for a year or two and bailed out.
 

redseat

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The golf explosion that started 25 years ago has faded and this is nothing more than a market correction that has been brewing for a while. While we can certainly give Tiger woods a lot of credit for turning eyes towards the game and helping it grow the growth started before he hit the scene and golf courses started popping up everywhere. Equipment manufacturers developed new technologies that allowed weekend duffers to hit the ball as far as the pros of the 60's did and they were able to charge outlandish prices for them. Greens fees at many CC's got out of hand as well.

To compound the problem most people who took up the game quickly realized that it is not as easy as it looks on the telly. So most folks bought equipment, played sporadically for a year or two and bailed out.

True, us weekend hacks can do almost as well (accuracy wise) as the pros and that will make us feel like we can do anything. I am just a little shocked that the price was so "low" imo for the sale.
 

ATL96Steeler

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Adidas...made the cardinal sin of investing...bought high.

Maybe Adams and Ashworth were decent values, but they paid way more than TM was worth.

Golf market and the Tiger effect...no doubt millions of new golfers picked up the game as a result of his presence, but the Great Recession did more to kill off the demand than anything.

Now golf is settling back to it's core market, (market correction is spot on).
 

redseat

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Still it is basically 3 "brands" that are being sold and they are only sold for $425, seems low to me
 

Used 2 B Hu

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Planned obsolescence works in some industries when the good times are rolling, but eventually backfires when times get tight.

No surprise these companies are moving back to Apparel. Clothes and shoes wear out faster and you can sell more product continuously. A good set of clubs should last you a while and there's absolutely no need to keep buying a brand new set every year or two.

These companies over-produced and the market is flooded.
 

redseat

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Planned obsolescence works in some industries when the good times are rolling, but eventually backfires when times get tight.

No surprise these companies are moving back to Apparel. Clothes and shoes wear out faster and you can sell more product continuously. A good set of clubs should last you a while and there's absolutely no need to keep buying a brand new set every year or two.

These companies over-produced and the market is flooded.

This is true, my brother in law has had his set for 15 years..
 

ATL96Steeler

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Still it is basically 3 "brands" that are being sold and they are only sold for $425, seems low to me

It does seem low, but probably market rate for a private equity firm that typically makes their money by stripping away the fat of the operation and reselling for a profit.
 

ATL96Steeler

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Planned obsolescence works in some industries when the good times are rolling, but eventually backfires when times get tight.

No surprise these companies are moving back to Apparel. Clothes and shoes wear out faster and you can sell more product continuously. A good set of clubs should last you a while and there's absolutely no need to keep buying a brand new set every year or two.

These companies over-produced and the market is flooded.

Idk about Ashworth and Adams, but TM certainly over produced...their model was new product every season (even if the stores were still stocked to the gills)...my TM irons were purchase at the end of the model year.


tm irons.JPG

This was 3 or 4 yrs ago. but these irons were $749 in the spring...***new model***., I bought them in DEC of the same yr for $350, ordered them fitted at that so they were not off the shelf stock.

The next year model had the same exact design, different color scheme. $799...no way they could keep turning over their product line that quickly.
 

Used 2 B Hu

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The next year model had the same exact design, different color scheme. $799...no way they could keep turning over their product line that quickly.

Pretty ridiculous.

I get it if you have some fantastic new technological advancement, but you can't possibly have one every. single. year. Maybe once every 5-6 years, okay, I can believe these are slightly better than those.

I'm still playing with a set of Hogan blades
 

redseat

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It does seem low, but probably market rate for a private equity firm that typically makes their money by stripping away the fat of the operation and reselling for a profit.

true
 

redseat

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Idk about Ashworth and Adams, but TM certainly over produced...their model was new product every season (even if the stores were still stocked to the gills)...my TM irons were purchase at the end of the model year.


View attachment 159597

This was 3 or 4 yrs ago. but these irons were $749 in the spring...***new model***., I bought them in DEC of the same yr for $350, ordered them fitted at that so they were not off the shelf stock.

The next year model had the same exact design, different color scheme. $799...no way they could keep turning over their product line that quickly.

They just slightly change the angle of the irons and raise the price
 

ATL96Steeler

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Pretty ridiculous.

I get it if you have some fantastic new technological advancement, but you can't possibly have one every. single. year. Maybe once every 5-6 years, okay, I can believe these are slightly better than those.

I'm still playing with a set of Hogan blades

Yep. My irons are part of what they called the cavity back players club. Still a perimeter weighted iron, but smaller head than a true game improvement iron...forgiveness of a game improvement club, workability of a blade. That's really the last design change in the industry and that's 8+ yrs old now.

What's interesting is Titleist was always on a 18-24 mo product cycle...for a while they tried to keep up with TM coming out every 12-15 mos...I wonder if they will dial it back now.

Hogan blades were iconic...when they got some funding and made their comeback, they made some beautiful irons...same technology as my irons, but they just didn't have the marketing power to get them out on tour. A friend of mine has a set of forged cavity backs (similar design to mine, my clubs are not forged though).
 

mannyz

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I bought my Irons in 1981 from the Golf Pro at Overbrook GC in Bryn Mawr Pa. I sucked then, I suck now. Goes to show you the equipment does not matter, it is the golfer.
 

ATL96Steeler

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I bought my Irons in 1981 from the Golf Pro at Overbrook GC in Bryn Mawr Pa. I sucked then, I suck now. Goes to show you the equipment does not matter, it is the golfer.

Relative to par I think most of us suck...lol

That's true to a degree...if you don't have a consistent swing at all, you're right equipment won't help much. But, if you're a 18 hdcp playing with blades, you're going to have some mishits over 18 holes...these clubs punish mishits more severely. Going to a more forgiving club, your mishit might be 10-15 yds off the green instead of in the woods.

A sure dbl or worse vs a bogey, or maybe even up and down for par.
 

redseat

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I don't play nearly enough where any type of club would or wouldn't affect my game. So I really can't blame equipment for anything. Although I do and all but it really shouldn't mean squat to me.
 

ATL96Steeler

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I don't play nearly enough where any type of club would or wouldn't affect my game. So I really can't blame equipment for anything. Although I do and all but it really shouldn't mean squat to me.

Probably right over 18 holes on your own ball, but they worked for this guy.

I worked with a guy once that loved golf, but rarely got to play...maybe 2-3 times a yr. Every year we had a company golf outing and he looked forward to that like a kid waiting on Xmas. It was always best ball format so you really didn't have to be a good player or even a decent player to have fun.

He'd show up looking sharp, expensive clubs game improvement irons, and his swing looked like he bought it off the sale rack at Kmart, but he made good contact and he could putt pretty well...fun guy to play with in that format....the point is he used to have some old blades, nice clubs, but he rarely made good contact with them.
 

BTHOtu

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I had a TM driver that was meh
 

Rex Racer

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I bought my Irons in 1981 from the Golf Pro at Overbrook GC in Bryn Mawr Pa. I sucked then, I suck now. Goes to show you the equipment does not matter, it is the golfer.


Or as my grand-pappy used to say; "It's not the arrow, it's the indian"
 
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