Adidas "Actively Pursuing" a buyer for Taylormade Golf

[TomWishon]

 

Amen...I totally agree what you are saying but where are you getting the stats of the number of golfers decreasing and the amount of money spent on the game?

 

The National Golf Foundation. Most people/companies in the golf industry have a business subscription to the NGF to get their data on the game and the industry.

[TomWishon]

Most golfers don't realize how many units it takes EVERY YEAR to sustain $600 million in golf club sales. It is a TON - millions upon millions of units. And we've lost 6 million golfers and 2.5 million from the group that accounted for 71% of the total golf spending. Bring in the other 4 companies that comprise the 80% of the market share in premium brand clubs and consider the fact they also have to do massive units to sustain their revenue EVERY YEAR.

 

 

Are these figures world-wide or for the USA?

 

What if China develops a golf craze and a significant number of new golfers emerge? Look at South Korea and the LPGA - that's just round the corner.

 

Would it make more sense for an Asian company to buy TM? The holding company or owner doesn't have to be Euro-centric or USA-centric

 

 

Figures for lost golfers and lost core golfers are USA only. 5 companies doing $4 billion is worldwide sales from some years ago before things started to go south.

 

People can talk all they want about China as a growing golf participation country but that got slowed down a lot by a somewhat recent Chinese gov't edict shutting down golf course development. Someone will buy TM. It will happen. But my point is that it's not likely that any golf company will gain back what it has lost because the biggest golf market of all by far is going in the opposite direction and showing no signs of that changing anytime soon.

[pmcuk]

People can talk all they want about China as a growing golf participation country but that got slowed down a lot by a somewhat recent Chinese gov't edict shutting down golf course development.

 

 

Some interesting reading on many levels - apparently golf is "linked to corruption", so banned in the Communist Party:

 

China and golf

• China announced a ban on building new golf courses in 2004
  
• However, the ban has not always been enforced, and state media say the number of golf courses in China increased from 200 in 2004 to 600 in 2015
  
• Many local authorities have encouraged the development of golf courses to draw in tourists
  
• Environmentalists say the golf courses have damaged ecosystems
  
• In March 2015, China shut down 66 illegally built courses
  

One owner of a golf equipment store in Shanghai, who was only identified by his surname, Huang, told Reuters that his store's sales had dropped at least 30% last year.

Golf in China was "about the social interaction", he said. "If a company boss can't play with a government official, there's little point in him spending his money."

[tnord]

Someone will buy TM. It will happen. But my point is that it's not likely that any golf company will gain back what it has lost because the biggest golf market of all by far is going in the opposite direction and showing no signs of that changing anytime soon.

 

and my point is that it doesn't have to gain back everything it lost to be an attractive purchase. you CAN shrink all your operations and the way you do business to be a smaller and profitable company. there's almost 1B in revenue already there with strong, and positive brand recognition, and they can't sell it for $500M? there's some messy work involved in turning it around, like firing a bunch of people, but certainly not anything that doesn't happen daily in other industries.

 

titleist and ping are both doing alright aren't they? why is that?

[cxx]

Someone will buy TM. It will happen. But my point is that it's not likely that any golf company will gain back what it has lost because the biggest golf market of all by far is going in the opposite direction and showing no signs of that changing anytime soon.

 

and my point is that it doesn't have to gain back everything it lost to be an attractive purchase. you CAN shrink all your operations and the way you do business to be a smaller and profitable company. there's almost 1B in revenue already there with strong, and positive brand recognition, and they can't sell it for $500M? there's some messy work involved in turning it around, like firing a bunch of people, but certainly not anything that doesn't happen daily in other industries.

 

titleist and ping are both doing alright aren't they? why is that?

 

I'm not sure either Taylormade or Callaway could survive a transition to longer product cycles. They'd go bankrupt along the way. So far, bankruptcy has been the kiss of death for golf brands.

 

Titleist and Ping are more traditional brands that have a longer product cycle and repeat customers.

[Auditor_Kevin]

Wasn't Ashworth a really big name in golf clothes at one time? How quickly things change.

 

They refused to adapt with evolving golf style. Their shirts are like a throwback to the 1990's when we all wore horribly fitting cotton golf shirts with gobs of extra fabric draping off in every direction.

 

The brand is worthless to anyone under 250 pounds or 45 years of age.

 

Would it have killed them to release a line of modern fitted golf shirts like everyone else in the space?

 

You'd be better off putting a bullet in the brand and relaunching under an entirely different name.

[new2g0lf]

Someone will buy TM. It will happen. But my point is that it's not likely that any golf company will gain back what it has lost because the biggest golf market of all by far is going in the opposite direction and showing no signs of that changing anytime soon.

 

and my point is that it doesn't have to gain back everything it lost to be an attractive purchase. you CAN shrink all your operations and the way you do business to be a smaller and profitable company. there's almost 1B in revenue already there with strong, and positive brand recognition, and they can't sell it for $500M? there's some messy work involved in turning it around, like firing a bunch of people, but certainly not anything that doesn't happen daily in other industries.

 

titleist and ping are both doing alright aren't they? why is that?

 

I'm not sure either Taylormade or Callaway could survive a transition to longer product cycles. They'd go bankrupt along the way. So far, bankruptcy has been the kiss of death for golf brands.

 

Titleist and Ping are more traditional brands that have a longer product cycle and repeat customers.

 

Callaway is already extending their product life cycles and Ping has a longer product life cycle for their irons but their drivers and woods are released annually. Callaway needs to get into a product release cycle like Titleist so they release new products every year which keeps their revenue constant, woods on odd years, irons on even.

[ShowMe]

ProVs vs Taylormade is interesting because it shows how much Taylormade's marketing is short-term. Yeah, there are plenty of similar performing balls to the ProV at much cheaper prices, but people will still continue to pay the ProV tax for whatever reasons. The ProV as a brand has longterm value. That won't go away anytime soon just because there are other similar products. Taylormade's marketshare tho could go away quickly as its much more dependent on ads, sponsorships, sales strategies/relationships etc. and could lose a lot of that marketshare quickly. Taylormade users dont have the same loyalty as ProV users. Which makes buying Taylormade a tougher go.

 

I can't even keep track of which balls of Taylormade and Callaway are the premium ones. They change the names all the time. The chrome soft is the only one with an identity and it is not their best ball. Hopefully they won't change the name of that one.

 

Pretty much. Everyone will keep saying "but the pros...". That's only a small fraction of why people will buy something. It's name recognition. That's why people get it.

 

Same reason people keep buying Honda Accords and BMW 3's. They haven't changed the name of the car in so long, and while it might not be the absolute best car in it's segment, the brand is so strong that people will buy it no matter what.

 

That's what Titleist has going with the ProV line. That's what other brands aren't getting. They don't get a big market share, and right away they dump the name for something new thinking the name is why it didn't work. If they hold true to the name of the ball through a couple of generations, I'm sure they'll start to build up a larger market share.

 

Brand recognition comes from advertising. Along with having the most PGA pros under contract, which is done for advertising purposes, Titleist also does the most golf ball print, TV, and radio advertising. If Bridgestone, Callaway, or Taylormade had that many pros under contract and did that much advertising, their ball would likely be the best seller.

[cxx]

ProVs vs Taylormade is interesting because it shows how much Taylormade's marketing is short-term. Yeah, there are plenty of similar performing balls to the ProV at much cheaper prices, but people will still continue to pay the ProV tax for whatever reasons. The ProV as a brand has longterm value. That won't go away anytime soon just because there are other similar products. Taylormade's marketshare tho could go away quickly as its much more dependent on ads, sponsorships, sales strategies/relationships etc. and could lose a lot of that marketshare quickly. Taylormade users dont have the same loyalty as ProV users. Which makes buying Taylormade a tougher go.

 

I can't even keep track of which balls of Taylormade and Callaway are the premium ones. They change the names all the time. The chrome soft is the only one with an identity and it is not their best ball. Hopefully they won't change the name of that one.

 

Pretty much. Everyone will keep saying "but the pros...". That's only a small fraction of why people will buy something. It's name recognition. That's why people get it.

 

Same reason people keep buying Honda Accords and BMW 3's. They haven't changed the name of the car in so long, and while it might not be the absolute best car in it's segment, the brand is so strong that people will buy it no matter what.

 

That's what Titleist has going with the ProV line. That's what other brands aren't getting. They don't get a big market share, and right away they dump the name for something new thinking the name is why it didn't work. If they hold true to the name of the ball through a couple of generations, I'm sure they'll start to build up a larger market share.

 

Brand recognition comes from advertising. Along with having the most PGA pros under contract, which is done for advertising purposes, Titleist also does the most golf ball print, TV, and radio advertising. If Bridgestone, Callaway, or Taylormade had that many pros under contract and did that much advertising, their ball would likely be the best seller.

 

Bridgestone has a long term model name with the B330 and advertises a lot on TV. I suppose Taylormade and Callaway are in a catch 22 situation. No money to advertise because the balls don't sell. Introducing new models all the time isn't helping. It may work in drivers but not balls.

[rgk5]

ProVs vs Taylormade is interesting because it shows how much Taylormade's marketing is short-term. Yeah, there are plenty of similar performing balls to the ProV at much cheaper prices, but people will still continue to pay the ProV tax for whatever reasons. The ProV as a brand has longterm value. That won't go away anytime soon just because there are other similar products. Taylormade's marketshare tho could go away quickly as its much more dependent on ads, sponsorships, sales strategies/relationships etc. and could lose a lot of that marketshare quickly. Taylormade users dont have the same loyalty as ProV users. Which makes buying Taylormade a tougher go.

 

I can't even keep track of which balls of Taylormade and Callaway are the premium ones. They change the names all the time. The chrome soft is the only one with an identity and it is not their best ball. Hopefully they won't change the name of that one.

 

Pretty much. Everyone will keep saying "but the pros...". That's only a small fraction of why people will buy something. It's name recognition. That's why people get it.

 

Same reason people keep buying Honda Accords and BMW 3's. They haven't changed the name of the car in so long, and while it might not be the absolute best car in it's segment, the brand is so strong that people will buy it no matter what.

 

That's what Titleist has going with the ProV line. That's what other brands aren't getting. They don't get a big market share, and right away they dump the name for something new thinking the name is why it didn't work. If they hold true to the name of the ball through a couple of generations, I'm sure they'll start to build up a larger market share.

 

Brand recognition comes from advertising. Along with having the most PGA pros under contract, which is done for advertising purposes, Titleist also does the most golf ball print, TV, and radio advertising. If Bridgestone, Callaway, or Taylormade had that many pros under contract and did that much advertising, their ball would likely be the best seller.

 

Bridgestone has a long term model name with the B330 and advertises a lot on TV. I suppose Taylormade and Callaway are in a catch 22 situation. No money to advertise because the balls don't sell. Introducing new models all the time isn't helping. It may work in drivers but not balls.

 

Callaway balls are now number two in worldwide sales as of 2015.

[tannyhoban]

Didn't Callaway buy into 2 with the purchase of Top Flite years ago? Seems to me that was their position at the time, maybe not but Top Flite was big. To build a brand it actually has to stay around longer than a year or two. Maybe they finally figured that one out as they seem to have stayed fairly stable with the ball line. And why didn't they add balls to the Boeing design collaboration? Seems more logical than clubs. Clubs don't fly do they? Oh wait. Never mind.

[Bad9]

It's about patents, right? That's where a lot of a golf companies value exists.

 

TM has the driver face tech. ICT (inverted cone technology). That's what made TM.

 

Any company that wants to build or boost their driver category has to be drooling over that possibility.

 

Why? Virtually every other company has similar technology and drivers that are as good or better than TM drivers across the range. At this point it about being fit for a driver optimized for you and not brand A is technologically better than brand B

[Arafel]

Didn't Callaway buy into 2 with the purchase of Top Flite years ago? Seems to me that was their position at the time, maybe not but Top Flite was big. To build a brand it actually has to stay around longer than a year or two. Maybe they finally figured that one out as they seem to have stayed fairly stable with the ball line. And why didn't they add balls to the Boeing design collaboration? Seems more logical than clubs. Clubs don't fly do they? Oh wait. Never mind.

 

Callaway sold TopFlite to DSG years ago.

[DatSliceDoe]

TMAG suffered from massive cannibalization and failure to slow down production when demand slumped. That combined with poor product choices like re-badging irons from years ago and calling them new because they come in a different finish, or don't have the same shafts is ridiculous.

 

If anything, I think they could have made a lot more money in golf balls and apparel if they had slowed down club production when demand dropped.

 

I still think they make a very competitive product and have for a long time, but brand loyalty doesn't exist in a world of custom fit, technology driven purchases when the driver is $500 MSRP and $250 within a year where performance gains are 0%-10% for most golfers.

 

I do think that killing Adams was a shame, and rumors of it becoming a store brand are likely true.

[tannyhoban]

Didn't Callaway buy into 2 with the purchase of Top Flite years ago? Seems to me that was their position at the time, maybe not but Top Flite was big. To build a brand it actually has to stay around longer than a year or two. Maybe they finally figured that one out as they seem to have stayed fairly stable with the ball line. And why didn't they add balls to the Boeing design collaboration? Seems more logical than clubs. Clubs don't fly do they? Oh wait. Never mind.

 

Callaway sold TopFlite to DSG years ago.

 

My duh, totally forgot about that.