Adidas lines up golf unit sale

Adidas chief executive Herbert Hainer, who in May praised the strong reception the company’s new golf drivers were getting from pros and duffers alike, did an about-face yesterday.

The R15 and AeroBurner drivers are losing the battle to the competition, Hainer said, in announcing that Adidas will seek buyers for some or all of the company’s TaylorMade business.

The focus at first is on finding a buyer for Adams, a sub-brand within the golf unit that makes clubs for beginners, and for Ashworth polos and cardigans. However, Hainer isn’t ruling out exiting the entire business.

Adidas’s TaylorMade golf division had €913m in sales last year, but valuing it is difficult. Golf supplier Callaway Golf is trading at 0.9 times forward sales on an enterprise basis, and Titleist ball maker Acushnet sold for $1.23bn (€1.12m), or one times sales, in 2011.

TaylorMade sales plummeted 32% between 2012 and 2014. There are no obvious suitors for the unit. Among the sporting goods makers, Nike gets less than 5% of sales from golf and is unlikely to invest in the sport. Under Armour sells golf apparel, and could potentially use a deal to add clubs.

Bloomberg