As Adidas ramps up its plan to sell its struggling golf business, there has been much speculation about which companies will step in and purchase one of the most well-known companies in the sport, Taylor-Made.
Under Armour Inc UA 2.55% has been noted as a viable candidate to purchase the golf brand, and capitalize on its growing golf presence with a key endorsement of Jordan Spieth.
Adidas plans to sell Taylor-Made, Adams, and golf apparel brand Ashworth, to increase the companies focus in the North American basketball segment of the business. Adidas does not plan to get out of the golf business entirely; the company still plans to continue making footwear and apparel for the sport.
Last year Adidas admitted it made a “huge mistake” with its golf strategy, sticking to a more traditional approach to the game and its apparel at a time when the sport was becoming increasingly more athletic. Under Armour and Nike Inc NKE 1.07% had capitalized on this shifting trend in golf and began producing golf apparel that was more similar in fashion to exercise apparel, Dri Fit shirts and spike-less golf shoes.
As Adidas looks to shop its golf business, it appears unlikely its competitors will look to increase its golf exposure. According to Reuters, “Adidas might draw interest from firms in Asia or a financial investor rather than a rival such as Nike, Puma, Under Armour or Callaway Golf Co ELY 1.13%, which might be wary of increasing exposure to golf.”
However, Under Armour is one of the few companies which has been looking to increase its presence in golf, especially with star-endorser Jordan Spieth sitting as the #2 golfer in the world. Under Armour does not produce golf clubs currently; Jordan Spieth uses Titleist clubs much like Tiger Woods when he signed his Nike deal in 1996 and the company did not make golf clubs. Also following in the footsteps of Nike Golf, UA has released Jordan Spieth’s personal logo for a signature apparel line.
The golf equipment industry is an $8.7 billion dollar business, with the US accounting for 41 percent of sales while Japan and South Korea were second and third in sales with 24 percent and 7.1 percent, respectively. With golf entering the Olympics this year in Brazil, Under Armour will look to increase its exposure internationally with Spieth. Now it remains to be seen whether Under Armour will look to acquire a club-making brand for its star player, or stick to an apparel strategy.