Munich, Germany: German sportswear giant adidas is contemplating the possible sale of some or all of its golf division, which includes TaylorMade, Adams and Ashworth.
According to a Bloomberg report, Guggenheim Partners LLC has been hired by adidas in the wake of disappointing financial results and an uncertain outlook.
adidas Group’s second-quarter report for analysts confirmed that TaylorMade-adidas Golf’s sales were down 26 per cent in the second quarter of 2015 because of declines in most categories.
Sell-through rates of new products were below expectations, and the overall recovery for the company is going more slowly than expected.
In a press release, the company said: “As a reaction to the persisting challenges at TaylorMade-adidas Golf, the adidas Group has initiated a major turnaround plan for its golf business.
“The set of measures is aimed at enhancing the company’s pricing, promotion and trade patterns, as well as optimising the supply chain and product costs.
“Furthermore, the Group targets a re-prioritisation of the global marketing spend and significant operating overhead savings at TaylorMade-adidas Golf.
“In addition, the adidas Group has engaged with an investment bank for the purpose of analysing future options for the company’s golf business, in particular the Adams and Ashworth brands.”
In the first half of 2015, Group revenues increased 7% on a currency-neutral basis, due to double-digit growth at adidas as well as high-single-digit increases at Reebok.
However, revenues at TaylorMade-adidas Golf decreased 17% currency-neutral, due to sales declines in most categories, in particular metalwoods and irons.
Summing up the company’s performance to date in 2015, Herbert Hainer, adidas Group Chief Executive Officer, said: “We have said all along that our new strategy ‘Creating the New’ will already show first positive results this year. The second quarter is proof positive for that.
“I am pleased to see how well adidas and Reebok are resonating with their respective consumers.
“2015 will be a successful year for the adidas Group. With a strong order book on hand, we are very confident that the robust momentum of our core brands adidas and Reebok will continue throughout the second half of the year and fuel the targeted top and bottom-line growth.”
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