With megaspecialty golf retailer Golfsmith International Holdings Inc. filing for bankruptcy on Sept. 14 and listing Adidas, Nike and Puma among its top creditors with unsecured claims, the tension continues to mount.
Is the golf business still a worthwhile one for shoe companies?
Adidas CEO Herbert Hainer signaled last year that he was ready to exit the golf business altogether after the company’s golf unit continued to experience decelerated growth. In the second quarter of 2015, after the golf division suffered currency-neutral revenue declines of 26 percent, Hainer suggested that he was considering a divestiture. He later said he would cut the TaylorMade-Adidas Golf workforce by 14 percent by the end of 2015.
This year, the company has seen a payoff from several strategic initiatives in the division with TaylorMade Golf turning positive again in Q2 — seeing gains of 7 percent. And last month, Adidas 2016 U.S. Open winner Dustin Johnson renewed their partnership.
For its part, Nike seems to be leaning toward weakening its ties with golf. In August, news broke that the company would exit the golf equipment business, and CFO and EVP Andrew Campion said in September that the move is part of a shift toward a “long-term focus” on driving greater growth and profitability in footwear and apparel.
Meanwhile, Puma — owed nearly $2 million by bankrupt Golfsmith for its Cobra Puma Golf product — is maintaining a steady presence in the golf space. The brand released its Ignite Spikeless Sport Golf Shoe in June and added Bryson DeChambeau (who turned pro this year) to its endorsement roster, which also includes PGA star Rickie Fowler.
Skechers USA Inc. has also gotten aggressive with its golf business — extending its contract with PGA veteran Matt Kuchar in April and adding pro players Russell Knox and Ashlan Ramsey to the list of athletes representing its Go Golf division.
For now, it seems to be a mixed bag for shoe companies and golf. Perhaps only time will tell which way the pendulum ultimately swings.