Nike’s Breakup With Golf Equipment Could Mean Business for this Brand

Nike to stop selling golf equipment

Nike to stop selling golfequipment  

Nike’s getting out of golf equipment. Adidas is trying to offload TaylorMade. That could mean big business for Callaway.

Nike’s golf business rang up $706 million last year. While that figure includes apparel and footwear sales, it presents a big opportunity for Callaway, a brand that’s rooted in the sport. Golf balls and clubs are the brand’s bread and butter, and accounted for some three-fourths of its $844 million in revenue last year.

TaylorMade is also due for a shakeup. Though there aren’t plans to shutter the brand, Adidas will not aggressively compete for marketshare as it tries to find a buyer, Jefferies analyst Randal Konik said. The company has already cut back on sponsorships, which is likely a way to boost its profitability ahead of a sale, Konik noted. Adidas on Thursday reported a 4 percent lift in TaylorMade sales during the first half.

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Callaway is already No. 1 in U.S. market share for clubs, Konik said. But TaylorMade is ahead in drivers and woods.

Golf participation has been on the decline, contributing to an 8 percent sales drop at Nike last year. Nike’s golf business has been contracting since its peak of $792 million in 2013. But those figures are starting to stabilize, with the number of rounds played this year edging slightly higher, according to Golf Datatech.

“Interesting that Adidas, Nike and [Under Armour], which are all great overall brands that we have a lot of respect for, appear to have moved to the same strategy,” Callaway CEO Chip Brewer told CNBC. “For those of us with commitment, momentum and specialist focus in the equipment space, we see it as an opportunity. We remain humble and hungry though!”

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