The shares rose as high as $11.48 in the wake of Nike’s statement Wednesday that it would stop selling golf clubs, bags and balls.
Advertisement
President of Nike Brans, Trevor Edwards, stated: “We’re committed to being the undisputed leader in golf footwear and apparel”.
Sales in the golf business fell 8 percent to $706 million in Nike’s latest financial year ended May 31.
GOLF gear manufacturers are circling the sport’s former world number one Rory McIlroy after his sponsor Nike announced it is stopping making equipment.
Daric Ashford, the president of Nike Golf, said sponsorships “drive tremendous energy” for the company’s golf segment.
But despite him winning The Open, the US Masters and the US PGA since switching to Nike, the company have struggled to compete with other golf club brands. Nonetheless, it was Tiger Woods who started it all and had Nike the largest revenue in the golf market.
Earlier this year Nike’s rival Adidas announced its intention to sell most of its golf business.
Personally, I’m shocked not by the fact that a company is getting out of the equipment business (it’s a costly endeavor); rather, it’s that a company which has Tiger Woods as a staffer is getting out of the equipment business.
Then there’s Titleist. Both Woods and McIlroy played their equipment before signing with Nike (or, even at the beginning of his Nike deal, in Woods’ case). For Nike, it’s probably not that big a deal but for Callaway Golf (ELY), it’s huge. “We’ll continue to ignite excitement with our athletes and deliver the best of Nike for the game”. Many retailers were put off when they bought a new Tiger signature shoe past year and Woods never wore it, instead preferring an old model.
Despite having top athletes representing the brand, Nike never claimed substantial market share or obtained market leads in any hardgoods category.
Steinberg would not disclose what Nike’s exit from the equipment business would mean for Woods financially. They plan to stay in the apparel department, but they’re out when comes to golf balls and clubs.
Advertisement
The plan stems from the losses it suffered in Nike golf equipment business.
