AusLeisure

An article on the BBC News website has delved into the recent moves by both giant sport brands Nike and adidas to scale back their involvement in golf to shoes and apparel, divesting themselves of their ranges of other golf equipment.

Even though golf this year returned to the Olympic Games after an absence of 112 years and the game is being played by growing numbers in Asia and Europe, including women and children, BBC Business reporter Bill Wilson highlighted that declining numbers of golf players in the USA (where numbers have declined from 30 million in 2005 to roughly 24 million last year) was behind adidas and Nike’s move.

With the USA accounting for half of all players and courses in the world, declining participation numbers in the game's biggest market means that other sports such as athletics and basketball offer more attractive opportunities for sales growth.

As general sports goods providers covering a plethora of sports, Nike and Adidas were also latecomers to what is a specialised field - one already occupied by established brands such as Ping and Titleist.

Commenting on this trend, Simon Chadwick, Professor of Sports Enterprise at the University of Salford in the UK stated “golf is a relatively mature market but with an increasing number of competing suppliers.

"At best, we have to say that the US golf market is static, while at the same time we have seen traditional golf markets across North America and Europe being hit by the rise of cycling.”

Middle-aged cyclists may be partly to blame for the challenges golf faces with some social commentators suggesting that, in the current decade, cycling is ‘the new golf’ for middle-aged men.

Professor Chadwick explains “there is some growth in the golf market elsewhere in the world, notably in East Asia, but this market is increasingly being served by domestic suppliers.

"It's a tough operating environment right now for an American golf business."

Nike has been in the golfing market for 17 years, and has had a high-profile stable of golfers, including Tiger Woods, Rory McIlroy and Michelle Wie.

It launched golf balls in 1999, with Woods starting to use their new solid-core Nike Tour Accuracy ball the following year.

Professor Chadwick added "Nike obviously had a vision that Tiger Woods would open up the market for golf to new customer groupings, but this has largely failed.

“Golf remains a stereotypical middle-class, white, male sport that hasn't really broken out of its traditional constituency.

"Compounding this, while golfers are likely to change their footwear on a regular basis, they are less likely to buy clubs on a similar basis. At the same time, competition has been growing, which in total all ensures that golf is a tough business to operate in - the returns on investment are not easily made."

Nike's market share in clubs, balls and bags has grown slowly and steadily over the years since then, but it has never secured a position of dominance.

As a result, the US firm says it will refocus its efforts on golf shoes and clothing, and away from clubs, balls and bags.

Like Nike, adidas hopes to sell the bulk of its golf business to concentrate on its own-brand golf shoes and clothing.

The company launched a review of its golf business last August, and wants to sell its brands TaylorMade and Adams, which make golf clubs and other equipment, and also the Ashworth golf shoes and clothing brand.

Adidas has been in the sport since 1997, when it bought TaylorMade as part of a US$1.4 billion acquisition of French skiing label Salomon.

However, despite the seemingly gloomy outlook, Nick Oakley, an expert at KPMG's sport industry group, believes these industry changes also offer opportunities.

Oakley says there is now a chance for the golf industry to move away from a golfing "supermarket" approach, and back to a more crafted and traditional "green grass" environment.

Such an environment, he says, would be driven by qualified and trained PGA professionals, able to provide a specialist and customised service, and also supported by brands whose core business is golf.

Click here to view thew original article on the BBC website.

4th August 2016 - NIKE TO STOP MAKING GOLF CLUBS AND BALLS, FOCUSING ON FOOTWEAR AND CLOTHING

24th June 2016 - COBRA PUMA BACKS AUSTRALIAN GOLF

3rd March 2016 - ADIDAS LOOKS TO BE OPERATING 12,000 STORES IN CHINA BY 2020

19th February 2015 - ABS NOTES DECLINING SPORT AND PHYSICAL RECREATION PARTICIPATION

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