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Adidas has decided to call time on its TaylorMade golf business, as well as its Adams and Ashworth brands, after the division has struggled to exit the bunker.
The German sportswear retailer hired investment bank Guggenheim Partners last year to review options for the business after battling to revive sales.
Following the review, Adidas said it has decided to “enter into concrete negotiations with interested parties aimed at a divestiture of parts of the company’s golf division”.
Although it will continue to sell golf footwear and clothing through its own “adidas golf” brand, it is seeking a buyer for the remainder of the business.
Adidas said in a statement earlier:
A final decision on the divestiture, including the detailed terms of a potential agreement, is subject to approval by the Supervisory Board.
Analysts at RBC said:
The golf business at adidas is loss-making, which we estimate to be -€100m in FY15 and a similar level in FY16. On this basis, we believe a clean disposal of TaylorMade adidas Golf business would be accretive to group EBIT margins. We believe TaylorMade could be worth between €700-800m.
However, we highlight a buyer has not yet been found, and the company is in ongoing discussions for TaylorMade, Adams and Ashworth. The actual impact on adidas’ financial position will be dependent upon the terms of the sale, and the break-up valuation of the golf business.