Another power player has exited the golf equipment business, with Adidas announcing Wednesday it has agreed to sell its golf brands TaylorMade, Adams Golf and Ashworth to private equity firm KPS Capital Partners for $425 million.
Despite being loaded with stars on the course -- TaylorMade has Dustin Johnson, Jason Day, 2017 Masters winner Sergio Garcia and on Tuesday announced a long-term equipment deal with Rory McIlroy -- the retail golf equipment market has seriously suffered.
The brands' sale price is evidence of the fall of the golf equipment market. In 2012, Adidas golf brought in $1.7 billion in revenue. Four years later, total revenue was slightly above $500 million.
In August, Adidas' biggest competitor, Nike, decided to stop making golf equipment. A month later, nationwide golf retailer Golfsmith filed for bankruptcy.
Adidas will continue to use golfers to sell its clothing, as both Johnson and Garcia will continue to wear branded shoes and apparel. Day and McIlroy have shoe and apparel deals with Nike.
While the National Golf Foundation has cited recent positive signs -- first-time golfers reached a record high in 2016 (2.5 million) -- the sport has had a hard time retaining those who try it.
The fallout in the equipment business has its roots in the Great Recession, which resulted in companies and retailers discounting clubs in order to drive up purchases in a business where product turnover is part of the equation.
Adidas took over the TaylorMade brand in 1997 when it bought French equipment maker Salomon for $1.4 billion. The company bought Ashworth for $72.8 million in 2008 and Adams Golf in 2012 for $70 million.