Nike: Out of the golf equipment business

[iacas]

1 hour ago, gregsandiego said:

Is that your local club @iacas ?

Define "your local club" (or not, really, because it's getting OT). Not all private clubs with memberships are "very expensive."

[Shooting29]

(I may have missed it as I just skimmed the posts so forgive me if it's been said)

I read a lot about growth of the game and in business in general. When I was a manager at a big box retailer growth was a guaranteed topic of conversation in any meeting. The question I always wanted answered and was always met with blank stares is, "how do you sustain indefinite growth? "

[Buckeyebowman]

On 8/5/2016 at 7:31 PM, freshmanUTA said:

To be fair, a lot of the people i know that are under 18 grew up with Rory, and with Nike being a multi-sport company they tend to prefer nike stuff. I mean most of the younger players i know have nike sets, nike shoes, shirts, etc. Rory helped just as much, if not more with this younger generation. Look at all the Rory Driver Headcovers that kids have. 

It's just the cost. Who can honestly say it's fun paying 20$ for 12 balls, on top of 50$ rounds, and buckets of range balls that are 10$ just to work on your swing. Not to mention the clothes are 50$+ for shirts, pants are expensive. It's just not reasonable to play.

Maybe, if we could make golf more affordable for everyone, the amount of people playing it would go up.

I agree about affordability, but there are things one can do to help that along. I went to the local Kohl's store today, because they are having clearances, and it was "sales tax free" weekend here in Ohio. I bought three incredibly stylish, moisture wicking, performance fabric shirts for about 10 dollars a piece! I have to tell you that I don't know if could have survived this Summer wearing cotton!

On 8/5/2016 at 9:05 PM, ScouseJohnny said:

Or, we need to get people to understand that golf doesn't need to be that way; you can choose to play golf in that manner, if you wish, but it is far from mandatory.

There's nothing wrong with playing muni golf, you can buy a dozen Noodles for half the price of the balls you mentioned, and as long as you are actually wearing a shirt, pants, and shoes on the muni course, no-one's going to give a damn about the logos or the fit. Oh, and this lunchtime I hit a bottomless bucket of balls for $8 at a driving range that's perfectly fine. It didn't have TrackMan and all that, but you can hit balls until the cows come home for $8. If it rains, they have covered booths. What more do you need?

Back on topic: Actually, I am sorry to see Nike leave the equipment market; I never bought their stuff, but I saw it cheap in Dick's. A blending of high-profile players and affordable equipment might have put clubs in the hands of teenagers; the likes of PXG only put clubs in the hands of corporate lawyers and investment bankers.

Yup! Our local muni is no pushover! The only thing it lacks is upkeep, but that is the lot of munis! As far as putting Nike clubs in the hands of teenagers, you have to be kidding! High profile players and affordable equipment don't walk hand in hand!

12 hours ago, gregsandiego said:

Well now is your time. 

The bad business climate is excellent for bargain hunters. Anyone who has a "membership" is probably at a very expensive course. But I bet you can find sub $20 rounds in central Ohio.

 

 

The "membership" idea is probably spot on, but I have played one of the top ranked public courses in the area for 10 freaking dollars through Golfnow,com! And more than once!

11 hours ago, iacas said:

Depends on what you mean by "very expensive."

http://whisperingwoodsgc.com/membership

Family memberships are as low as $3k. Under 30 and you can join for $1200.

Again, prices and conditions and expectations and whatever can be very, very different in different parts of the country.

(Here's another set of dues at a local very, very good golf course/private club): http://lakeviewcc.com/membership/dues.php .

Sorry, but for many people out here $3K or $1.2K will be classed as "expensive"! And it depends on what that money buys you. Does it buy you complete access to all the amenities, or simply allow you the privilege of booking rounds of golf at an upscale course at premium rates? And does it tie you into a monthly minimum at the club bar/restaurant?

Edited August 7, 2016 by Buckeyebowman

[iacas]

16 minutes ago, Buckeyebowman said:

Sorry, but for many people out here $3K or $1.2K will be classed as "expensive"! And it depends on what that money buys you. Does it buy you complete access to all the amenities, or simply allow you the privilege of booking rounds of golf at an upscale course at premium rates? And does it tie you into a monthly minimum at the club bar/restaurant?

It's everything, and it's not "very expensive." If you're a golfer, $1200 is not a ton of money. Surely not when it includes unlimited golf and cart fees, with no monthly minimums at all.

Let's not get distracted with off topic stuff, please.

[Pisano]

I'm not surprised that they are getting out of the golf equipment buisness, to be honest they were much better at apparel. That being said I was a huge fan of the hybrids they made for the vapor fly Probably my favorite hybrid club ive ever swung. Never got the opportunity to play there irons though. Hopefully they have some pretty good clearancence deals so I can pick up cheap golf balls though!

[ScouseJohnny]

12 hours ago, Buckeyebowman said:

Yup! Our local muni is no pushover! The only thing it lacks is upkeep, but that is the lot of munis! As far as putting Nike clubs in the hands of teenagers, you have to be kidding! High profile players and affordable equipment don't walk hand in hand!

I'm a big fan of playing municipal courses, I learned to play on them back in England, and I enjoy playing on munis in America, today!

"High profile players and affordable equipment don't walk hand in hand." The guitar industry worked out ages ago that they can (an interesting comparison to golf, actually, given there's the same lazy perception that "kids today" haven't the interest in something which is difficult to get started with, and requires lessons and a lot of dedicated practice). But there's a reason why a mid-range manufacturer like Epiphone paid someone like Slash however much money to endorse their product and agree to the release of a signature-model Les Paul. Now, I admit, Slash likely isn't going to take to the stage any time soon with an Epiphone Les Paul, but then no-one's going to walk into Dick's and buy a set of Nikes set up to Tiger's specs, either. If the teenager who buys the Epi Les Paul with the Slash signature sticks with playing the guitar, then chances are he'll be back a decade later when he has the income to buy a Gibson, anyway. The Gibson/Epiphone company got his money twice.

I remember going into Dick's in Greenville, SC about 2012 or so, with the intention of looking at some Cleveland irons. Next to the Clevelands on the rack were a set of Nike game improvement irons; I've no idea what they were, but they were priced at $350 or something like that. Maybe in the budget of a teenager bagging groceries at the weekend, especially if supplemented with some birthday money?

My point is that high-profile players + affordable equipment (made cool by the affiliation of the aforementioned high-profile players) does sound like a great idea. Unfortunately, it seems, it hasn't worked too well in the golf equipment industry.

Edited August 7, 2016 by ScouseJohnny

[Chris223]

My Nike Ignite irons cost me about $300 at Dicks and I love them.  I looked them over for about 5 minutes, loved the way they looked, asked the guy for a set.  I always look at irons when I am in a golf shop and have yet to really see a set since that had "that look" that made me want to buy them with the confidence I could hit them well.  I agree golf doesn't have to be expensive, but I also think a lot of golfers might kinda fall into my category... I play maybe 10-15 times per year due to my work schedule its simply all I have time for...  Memberships at courses near me I pay $30-$60 to play on would require me to play 30-40 times to make the memebership worth it... So its not work it.  Plus I wouldn't suggest to anyone seriously interested in getting into golf going a membership route, I personally wouldn't want to limit myself to one course to play.  You're surely not gonna play several different courses if you've essentially prepaid for 30-40 rounds at a course you're a member at

[newtogolf]

Read about this while I was away, sad but not surprising.  Rory is having a great career but he's not Tiger and without Tiger, Nike golf just isn't as exciting.  Tiger got me hooked on golf and my first bag and driver were Nike.  I've owned a lot of Nike clubs throughout the last five years, I liked them all but they never could stay in my bag long.   

Callaway, TM, Titleist, Cobra and others are probably concerned that Nike exited the hard goods in golf.  While one less competitor means the others may gain a few extra customers the greater impact is the message that is sent to the market.  This could affect the selling price of TaylorMade and Adams and the IPO of Titleist.  

Nike scaled down their product line for 2016, it was likely a last ditch attempt to salvage the business.  Overall, it was a good business decision, as a result their stock price went up and their investors are happy.  

[Ping]

Apparently, Nike came to the realization that their irons can no longer compete against the best irons ever produced, the Ping Eye-2..

[Natural Patrick]

I guess I have never hit a Nike golf club. I have tried about half dozen different balls.that they had made over the years. I never found one that I liked.

[Natural Patrick]

2 hours ago, newtogolf said:

Read about this while I was away, sad but not surprising.  Rory is having a great career but he's not Tiger and without Tiger, Nike golf just isn't as exciting.  Tiger got me hooked on golf and my first bag and driver were Nike.  I've owned a lot of Nike clubs throughout the last five years, I liked them all but they never could stay in my bag long.   

Callaway, TM, Titleist, Cobra and others are probably concerned that Nike exited the hard goods in golf.  While one less competitor means the others may gain a few extra customers the greater impact is the message that is sent to the market.  This could affect the selling price of TaylorMade and Adams and the IPO of Titleist.  

Nike scaled down their product line for 2016, it was likely a last ditch attempt to salvage the business.  Overall, it was a good business decision, as a result their stock price went up and their investors are happy.  

Speaking of good business and Tiger.

On 8/4/2016 at 9:14 PM, Natural Patrick said:

50 million for a guy who probably could not win on the Web.Com tour. Sounds like good business strategy to me.

How exciting is Nike with Tiger now ?

[newtogolf]

21 minutes ago, Natural Patrick said:

Speaking of good business and Tiger.

How exciting is Nike with Tiger now ?

Clearly Tiger not winning a Major since 2008 has hurt Nike but they would have likely been okay if Rory lived up to his $100M contract and Tiger didn't sit out the last 3 years with injuries.  

[Natural Patrick]

16 minutes ago, newtogolf said:

Clearly Tiger not winning a Major since 2008 has hurt Nike but they would have likely been okay if Rory lived up to his $100M contract and Tiger didn't sit out the last 3 years with injuries.  

True.

[Spitfisher]

2-3% market share in 17 years is not being successful & considered a failure in any industry, with that marketshare and paying athletes such as theirs is  well not very smart. If they truly wanted a club business in hindsite money better spent would have made a move fo Callaway when they almost a penny stock or bought Titliest for 1.2b

[newtogolf]

Nike was the new kid on the block in relation to many of the other major golf club manufacturers and never gained the respect (for lack of better word) that the others enjoyed.  I noticed a lot of newbies to golf had Nike golf bags and clubs and only a small percentage stuck with them over time.  

They produced some good clubs, for a while it seemed everyone had a horrible sounding Sumo driver in their bag at some point.  I really liked some of their Method putters but I think they were taken less seriously because of Nike's desire to cover the entire market with putters ranging in price from $40 - $300.  

It seems the golf industry is working against itself.  At  a time when many complain the cost of entry into the sport is too high, golf manufacturers continue to increase the cost of clubs and boutique companies like PXG and Hogan are targeting an even higher end market.   

[nevets88]

Nike and Adidas are getting out of the golf business at exactly the wrong time

Quote

In a note to clients about Dick's Sporting Goods, analyst Mike Baker noted that rounds of golf played have been growing over the past two years, and the growth appears to be accelerated.

"First, rounds played were reported up 5.3% in June and up 2.7% [year to date] in 2016, as show in our chart of the week," Baker wrote, using data from the Professional Golf Association.

"This is an acceleration from up 1.8% in 2015, and continues a three-year run of improvements in rounds played since the business troughed in 2013."

http://www.businessinsider.com/nike-adidas-getting-out-of-the-golf-business-at-wrong-time-2016-8

[Big C]

21 minutes ago, nevets88 said:

Nike and Adidas are getting out of the golf business at exactly the wrong time

http://www.businessinsider.com/nike-adidas-getting-out-of-the-golf-business-at-wrong-time-2016-8

Interesting observation and it's one that I've noticed in my line of work as well. In general, the large national companies just totally mis manage the cycles, glutting the market when profits are dropping and staying out when times are good. Their fatal flaw is that they tend to be rear-view driven, so their decisions going forward are based on the prior 3-5 years, as opposed to a consistent and long term view of the marketplace. 

What will inevitably happen is that Titleist/Ping/Mizuno/Callaway will enjoy banner years in 2017 and some big National sports brand (maybe Nike, but likely someone else) will get the itch to make a splash back in the market. But by the time they have set up their team and are ready to roll forward with manufacturing in 2019, the profits will have already been made.

 

[imsys0042]

Few companies look ahead more than a year, and many divisions and employees are concerned with only the current quarter and what can be done to make, or massage, those numbers.

I don't think rounds going up is going to affect Nike's decision.   Golf is a small part of what they do and closing the business has minimal impact.  If Taylormade can't be sold soon, Adidas might not sell if there are improvements in the golf industry.  TM has bigger market share and if they do the smart thing and cut back on their product lines and keep a size-able share, they can rebound.

Nike's decision is probably a smart one, business wise, although I hate seeing people lose their jobs when they were making money, just not enough money.,   Even at my country club, with it's OOC membership, a lot of people are not putting new equipment in their bags year after year.   There are a few who always buy the latest and greatest, but most don't.  With too many equipment companies it depressed the industry.   There simply are not enough golfers to have so many companies with large product lines or mass produced clubs.   Replacing clubs is a long cycle, even for the latest and greatest drivers.

I don't think the equipment makers would be considered in a slump if there were fewer.   PXG actually has the right idea in this market.   Make a huge mark-up on the small segment that will pay those prices.  You  can't start a large equipment company right now, there are too many players.   It's like getting into the PC business.  

FWIW, my current irons are keepers and will remain for 10+ years at least.  Hopefully until I cannot hit them anymore.,   I am replacing the shafts, but would rather do that than get new models.   To me, irons are irons.   If they go far enough and have the right ball flight, I don't need to upgrade every 2-5 years.  Woods are a little different.   I've gotten new ones at different technology changes, when there is something that proves to be a benefit.   The last upgrade was a Titleist 913 to get the fitting system with those clubs.   Hope to have them for years.  I'm probably not the ideal customer for a club maker.