Nike is Saying Goodbye to Golf Clubs

nike-nke-logoNike Inc. (NYSE:NKE) surprised many investors this week with its stunning announcement it was abandoning the golf equipment category. Many remember the company bet big on Tiger Woods, but in recent years with the injuries mounting to the golfing legend, the company felt serious effects on its golf club sales revenues.

The number of people playing golf has been on the decline, contributing to an 8 percent sales drop at Nike last year. The company’s golf business has been in steady downtrend since its peak of $792 million in 2013. The company has been in the golf business since 1984. While the company is used to dominating most aspects of sports retail it competes in, golf equipment has not fit that same bill. With competitors like Callaway and TaylorMade dominating the dwindling club business, Nike simply has been unable to gain traction.

Nike will cease making golf clubs, but will continue to make golf footwear and apparel. The company said in a statement that “We’re committed to being the undisputed leader in golf footwear and apparel. We will achieve this by investing in performance innovation for athletes and delivering sustainable profitable growth for Nike Golf.”

While Nike had been able to dominate for years with basketball shoes sales in identifying supreme talents such as Michael Jordan and Lebron James, the company’s luck has seemed to run out with Tiger Woods’ struggles as well as Nike’s other big golfing star under contract, Rory McIlroy, having not won a PGA Tour event this season. In fact, the winners of the past eight majors haven’t been Nike athletes.

We’ll see if the company moving away from golf clubs will eventually improve the company’s bottom line, but for now investors will just have to wait and see. Shares of Nike are down nearly 11% year-to-date.

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