German sportswear company Adidas has appointed investment bank Guggenheim Partners to help with the possible sale of its golf brands, which are struggling as the sport loses popularity, particularly in its biggest market, the United States.
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Net profit rose 1 percent to 146 million euros, which compared with a consensus market forecast of 147 million, although lower product margins in the golf business weighed on the operating margin, which fell 0.4 percent to 6 percent.
“The second quarter is proof positive for that”, said global CEO Herbert Hainer, in a news release.
Despite, hard comparisons after record World Cup related sales in the prior year second quarter, topline at Adidas Group expanded 15 per cent year over year in the second quarter of 2015.
Adidas bought TaylorMade in 1997, eventually building it into the biggest company in the sport.
Adidas is also working on a concept to make sneakers, and later apparel, directly in the store, from measurements taken from customers, business newspaper Handelsblatt reported on Thursday.
Non-strategic division are being examined at this point, like the golf branch TaylorMade. “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”, the company said.
The firm said the review would look at at its Adams and Ashworth brands in particular.
Adidas has already overhauled top management at the golf business, including appointing David Abeles as its new chief executive in March, and launched a restructuring programme past year. Mr. Hainer has said he expects Adidas to be profitable in North America by the end of the year.
Currency-neutral sales for the Adidas brand improved 8 per cent, driven by double-digit sales increases at Adidas Originals and Adidas Neo as well as mid-single-digit growth in the training category. “With the issues that they have with the Adidas brand I think its smart to not have any further distractions”.
TaylorMade sales plummeted 32% between 2012 and 2014.
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On Wednesday it announced the purchase of a smartphone application for joggers, Runtastic, for 220 million euros. And sales at Adidas Originals grew 37 percent, bolstered by collaborations with music stars Kanye West and Pharrell Williams.
