Nike Golf Transitions out of Equipment

NIKE, Inc. announced today that  Nike Golf will transition out of equipment — including clubs, balls and bags, and focus its efforts on innovating apparel and footwear.  The news comes should not be shock, as Golf is the smallest sport category at Nike, and sales for the unit slipped 8% to $706 million (down from $769 million in May 2015) for the fiscal year ended May 31.

None of this should be surprising to the Golf industry, as earlier this year, Adidas AG, was actively seeking a buyer for parts of its golf unit (Taylormade-Adidas Golf, Adams and Ashworthgolf brands.), after years of slumping sales.  These brands largely produce golf hardware. The company would continue to focus on golf apparel and footwear through its Adidas Golf brand.

What remains to be seen is what happens to patents that Nike Golf has developed for the golf equipment, and if it decides to sell those or license them to other OEMS. The decision to leave the equipment business, is a no brainer, considering the margins on equipment are very slim.  It will be interesting to see how soon Nike Golf Athletes Rory McILroy and Tiger Woods sign new equipment sponsors, and when the fire sale will begin at retailers nationwide.

More to come as this story develops.

Author: Rob Hayashida

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