German sportswear-maker Adidas has engaged an investment bank to consider the possible sale of its struggling golf brands amid a global decline in the popularity of the sport. David Pollard reports.
Adidas may have thought it potted a trio of holes in one when it bought Adams, Ashworth and TaylorMade. In fact, those golfing brands have ended up in the bunker. Adidas has now engaged an investment bank to investigate their sale. Golf's been on the way down in the last decade - notably in the US, around half the world's market. Young people - and companies - switching to different forms of social networking and shying away from the sport's expense. Revenue falls at TaylorMade last year forced Adidas to make several profit warnings. Prompting some to ask whether the golf brands might be a hard sell. ETX Capital's Head of Sales Trading, David Papier, says in all likelihood, 'no problem'. (SOUNDBITE) (English) DAVID PAPIER. HEAD OF SALES TRADING, ETX CAPITAL, SAYING: ''Look, the golf market is in decline, absolutely, but it is still a huge worldwide market and it's one of the world's most popular sports.'' Overall, the German company's quarterly sales were above forecasts at 3.9 billion euros, with a large positive impact from currency moves. Net profit up one percent. But little word on the group's struggle to regain market share against Nike. The American firm, says Papier, has distinguished itself with its branding - unlike Adidas. (SOUNDBITE) (English) DAVID PAPIER. HEAD OF SALES TRADING, ETX CAPITAL, SAYING: ''I don't really think consumers have connected with them in the same way they've connected with Nike. It's not necessarily that we don't love them, but does this matter ... I think it does, because if they had been great at communicating as well as they've been making football boots, there's a good chance they could still be number one.'' Adidas did say it's started a turnaround plan to improve price, promotion and trade patterns. While at the same time saving costs.