German sports brand Adidas has asked a bank to evaluate the future of its golf branch, as it does not align itself well with the company's ambitions. A sale of the branch, or at least some of its brands, seems quite likely.
Turnover up 16 % in the first semester
The largest European sports product manufacturer presented excellent results for the first half of 2015: turnover grew 16.1 % to 7.990 billion euro, although exchange rate fluctuations were partially the reason for the growth. Eliminating those fluctuations (including a strong dollar) would have led to a "mere" 7 % increase. Amidst the good results, the company is worried about the current situation in the Ukraine and Russia.
Net profit lagged behind a bit, with a 10.5 % increase to 385 million euro, which was partially because its gross sales margin dropped 0.4 % to 48.8 %. It also wrote off 18 million euro in goodwill for its activities in Latin America and Russia.
Future of golf branch up in the air
Non-strategic division are being examined at this point, like the golf branch TaylorMade. That division was part of the French Salomon acquisition in 1997, the previous owner of the brand. Unfortunately for TaylorMade, its forecasts have worsened dramatically, as sales in the United States and Europe are falling.
Golf was worth 913 million euro last year, 6.2 % of Adidas' total turnover. TaylorMade-adidas Golf has 4 separate brands: TaylorMade Golf, adidas Golf, Adams Golf and Ashworth and particularly the latter two are on the chopping block.