Adidas follows Nike’s swing and sells its golf brand for 425 million dollars

Plummeting interest in the sport, lack of superstars to add luck lustre to brand sponsorships and a still reluctant to indulge consumer seem to be the main reasons for Adidas to follow rival’s Nike’s example and divest from the golf apparel niche.

On Thursday, the Germany-based company announced it’s selling its golf equipment and clothing brands as interest in the sport plunges globally. It’s worth recalling how, not even a year ago, Nike said it was to “transition out” of selling golf clubs, balls, bags and apparel as profits stalled.

Adidas divests from its golf assets as interest in the sport fades out

As the trends settles, expedited as well by formerly golf’s golden boy Tiger Woods’ fall of favour, Adidas has managed to offload its golf brands, selling TaylorMade, Adams Golf and Ashworth to a private equity firm for 425 million dollars.

This counts as a big win for the athletic apparel group, which had been trying to offload the loss-making brands for some time now.

As explained by the firm, KPS Capital Partners will pay Adidas half of the sum in cash, and half in a combination of secured note and contingent considerations.

Although talks have already kicked off – sources close to the matter said that they actually started back in August last year -, the deal is not expected to close until autumn 2017.

"We welcome all Adidas Golf employees who will be integrated into our Adidas Heartbeat Sports Business Unit," Adidas CEO Kasper Rorsted said in a statement. "Our focus is clearly on our core competencies in footwear and apparel and on our two major brands, Adidas and Reebok."

Image:Rory McIlroy for TaylorMade, TaylorMade Web