adidas Cuts 15% of Golf Workforce, Closes Adams Golf HQ in Plano, TX
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adidas Cuts 15% of Golf Workforce, Closes Adams Golf HQ in Plano, TX

adidas Cuts 15% of Golf Workforce, Closes Adams Golf HQ in Plano, TX

Written By: Tony Covey

Earlier this evening we received confirmation that The adidas Group (parent company for TaylorMade-adidas, Ashworth, and Adams Golf) has decided to close Adams Golf headquarters in Plano, Texas and to consolidate business operations at TaylorMade Headquarters in Carlsbad, California. Additionally,15% of the golf division’s global workforce, including what I’m told is a majority of Adams Golf employees, has been laid off.

A company spokesperson declined to comment on specifics, but confidential sources are telling us that the cuts include a high-ranking member of TaylorMade’s golf ball R&D Team.

Here is the official statement from TaylorMade-adidas Golf:

“We recently announced that a reorganization of our company was being planned.  This restructuring includes the consolidation of our Adams Golf business currently located in Plano, TX to our global headquarters in Carlsbad, CA.  We are also realigning our workforce at TaylorMade to better meet the needs of our business and ultimately, our consumers.  This includes investing in new areas to strengthen our brands and strategically approach our future to reinforce our leadership in the industry.”

I know. It’s not particularly informative.

For those tracking TaylorMade’s financial situation, the moves come as little surprise. Profits are off significantly from last year, Dick’s Sporting Goods golf business basically imploded under the weight of excessive TaylorMade and inventory, and as a result the parent company is forecasting further declines in its golf business for the remainder of 2014. The Q2 report was a disaster. There really weren’t any better options.

Profitability Challenges

“We also have decided to take strategic measures to tackle our profitability challenges at TaylorMade-adidas Golf and in Russia/CIS.” – Herbert Hainer, adidas Group CEO

At best the disintegration of Dick’s Golf Business was bad PR for TaylorMade, and worse still it has caused serious damage to the company’s bottom line and likely its reputation. One of their marquee athletes (Dustin Johnson) is taking a leave of absence from the game under apparently dubious circumstances, and for the coup de grâce, just last week adidas released it Q2 2014 which rather explicitly cast TaylorMade-adidas Golf division in the role of 10-ton financial boat anchor.

These are not happy times at TaylorMade.

dear-shareholders

Just the Facts

It’s been suggested to me that when it comes to the financial reporting of the golf industry it’s best to either hire an expert, or stick to the absolute letter of the facts.

That’s probably sound advice.

Granted, I did manage to get through a 2-day Finance for Managers course at a previous job (next up, Spelling for Writers), but realistically that no more qualifies me for the task at hand than staying at a Holiday Inn Express last night.

So in the interest of not letting opinion creep into a realm of absolute fact, for the next few paragraphs we’ll stick to the bullet points from the adidas quarterly report (download HERE). That said, one probably doesn’t need to be a top-tier Wall Street analyst to realize that when the letter from the CEO to shareholders begins “It is with disappointment that…” what comes next ain’t gonna be good.

Mainly As A Result of Double-Digit Sales Declines. . .

While there were some unquestionable bright spots in that previous mentioned adidas financial report – things like a strong World Cup, a new sponsorship deal with Manchester United, and solid growth at Reebok-CCM Hockey – nearly every bit of good news was tempered by bad news from the golf division. The refrain mainly as a result of sales declines (sometimes double-digit sales declines) at TaylorMade-adidas Golf is found numerous times in the report.

I encourage you to read it in its entirety, but in the interest of avoiding TL;DRs, here are some of the unfortunate facts gleaned from the adidas Group financial report:

  • TaylorMade-adidas Golf sales were down 18% in Q2, and 27% year-to-date
  • That amounts to a €236 million (~$315 million US) decline from the first six months of 2014
  • Currently-neutral sales in North America were down 20%, mainly due to double-digit decreases at TaylorMade-adidas Golf
  • The gross margin of TaylorMade-adidas Golf negatively impacted the group’s gross margin by 40 basis points.
  • Given the challenges with TaylorMade-adidas Golf, the adidas Group expects a double-digit decline in other businesses compared to our previous projection of a stable performance. (Note: Other Business is the internal division in which adidas places TaylorMade-adidas Golf )

tmag-outlook

Simply put, TaylorMade is having a really bad year, and its parent company (The adidas Group) doesn’t think it’s going to get better anytime in the immediate future.

How Did We Get Here?

By now most of you are well aware of what happened to get us (and TaylorMade to this point). The industry was forced to weather it’s second consecutive brutal winter (the adidas report mentions the late start to the season in the Northeast). As you know from our story on the Dick’s debacle, there’s more inventory in the retail channel than anyone can reasonably hope to sell in a timely fashion. There are some numbers (although not everybody agrees) that suggest consumers are buying less equipment, but nobody is arguing that the bulk of what they’re buying isn’t heavily discounted. TaylorMade’s profit margins are down.

If you want to, you can throw in something about the decline of the American middle class and a general lack of consumer confidence too. The bottom line is that the golf industry is hurting right now, and TaylorMade’s wounds are as deep as anybody’s.

By the adidas Group’s own admission (it was discussed during the earnings call), it was slow in responding to the downturn in the market. The retail channel was already flooded, but TaylorMade kept on releasing new gear while refusing to discount their flagship lines.

The company recently reversed course on its promise not to discount SLDR (now as low as $369) until the next big thing was ready. The disappointing YTD results mandated the change in policy, but most would agree that it waited too long to have any meaningful impact on the market.

What’s TaylorMade Going to Do About It?

The question is actually what is adidas going to do about it?

other-businesses

In actuality, a few things have already been done. While big changes (like the closure of Adams HQ, and substantial layoffs) are expected as a result of the less than stellar financial results for the year to date, the reality is that things at TaylorMade-adidas Golf have been in a perpetual state of flux since the end of the first quarter.

In April, TaylorMade’s longtime CEO, Mark King was appointed to the position of President of adidas Group North America. Ben Sharpe moved over from his position of Executive Vice President of adidas Golf and Ashworth to takeover for King. Coincidentally or not,  Bob Maggiore, TaylorMade’s Cheif Marketing Officer, and the man widely credited with creating the aggressive marketing strategy that helped TaylorMade ascend to the top of the golf industry, also left the company.

That’s barely the beginning. The adidas Group plans to take an aggressive approach to restoring the expected levels of profitability for shareholders.

How will they do that?

Here’s what adidas Group CEO Herbet Hainer had to say about what’s going to happen next.

“At TaylorMade-adidas Golf, given the inventory that is still in the market, we will carefully look at new launching introduction timings. In addition we will begin restructuring program at TaylorMade-adidas Golf to align the organizations overhead to match lower expectations for the golf industry’s development. Combined I expect these measures will impact second half operating profit by €50 million to €60 million. As the dominant market leader, we take these initiatives now to secure our lead, and to be the first mover in reinvigorating the market. Our innovation pipeline is full and we are set to go, whenever we feel the market is ready.” – Herbert Hainer, adidas Group CEO

In layman’s terms, some serious shit is about to go down…and I suppose it just did.

Inventory Reduction: Mr. Hainer suggested that as the market leader TaylorMade has a responsibility to the market itself. At a minimum the Group sees a need to help “clean the market“. What that likely means is another round of deep discounts for consumers. adidas has effectively written of the golf business for the rest of 2014, so there’s absolutely no reason not to undertake a major effort to unclog the channel. Arguably this is good news for the golf industry.

Additional TaylorMade Product is 2014 is Unlikely: You can’t rationally argue that the channel is flooded and then funnel more gear into the marketplace. PING has new product. Callaway has new product. Titliest has new product on the way too. Rather than fight for whatever premium dollars are left to be grabbed, it appears TaylorMade will do the responsible thing and hold off any significant product launches until 2015 – even with both SLDR Driver and SpeedBlade due for a refresh this fall. Instead of hyping new gear, the focus will be on clearing the shelves of existing product (see above).

Come 2015, TaylorMade will be ready to go (see that bit about the innovation pipeline).

Restructuring: It’s an ugly word that can mean a variety of things, none of them are good, and nobody does it when business is booming. The Group’s goal is to come up with €50 million to €60 million worth of operating profit by the end of the year. For those too lazy to do the conversion, we’re talking about somewhere between $65 and $80 Million USD worth of expenses that adidas wants off TMaG’s books.

Where is all that money going to come from? It’s murky, but we can make a few educated guesses.

No new product means reductions in related manufacturing, shipping, and advertising costs. There’s a savings there, but nothing that gets you close to $80 million bucks. Multiple sources speculated that the bulk of savings would need to come from salary reductions.

Today that speculation has become reality as the company reduced the size of its golf division’s workforce by 15%. We don’t have an exact headcount, but we estimate the number of employees let go is between 200 and 250.

It’s stomach churning. Worse still, we’re being told that very few high salary positions were cut, so another round of layoffs isn’t outside the realm of possibility.

The Shutdown Of Adams Golf

One way to reduce cost is to eliminate duplicate positions. When the balance sheet looks good it’s less of an issue to have redundancies in areas like HR, finance, and IT. When the balance sheet doesn’t look good, positions perceived as redundant are often among the very first to be eliminated. That appears to be, in part, what’s happening at…or perhaps to Adams Golf.

In the interest of avoiding any confusion; the Adams Golf brand hasn’t been eliminated. The company’s headquarters in Plano, TX will be shuttered (metaphorically…maybe literally), but some members of the current Adams staff are expected to relocate to Carlsbad to manage the brand from TaylorMade headquarters.

Since Adams falls under the TaylorMade umbrella it’s hard to know exactly what their numbers look like. Sources are telling me that Adams is currently running $10-15 Million in the red. When TaylorMade purchased Adams over two years ago, many believed the shutdown of the Plano location was a foregone conclusion anyway. With adidas looking to reshape a leaner and meaner golf division with a reinvigorated emphasis on profitability, maintaining the Texas location makes zero practical sense.

The closure of the Adams facility in HQ is unfortunate, but it’s just the latest example of the consolidation taking place within the golf industry.

Unfortunately, There’s Likely More To Come

This is likely only the beginning of what is shaping up to be major changes at the current #1 company in golf. We’ll provide additional details as soon as they emerge.

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Tony Covey

Tony Covey

Tony Covey

Tony is the Editor of MyGolfSpy where his job is to bring fresh and innovative content to the site. In addition to his editorial responsibilities, he was instrumental in developing MyGolfSpy's data-driven testing methodologies and continues to sift through our data to find the insights that can help improve your game. Tony believes that golfers deserve to know what's real and what's not, and that means MyGolfSpy's equipment coverage must extend beyond the so-called facts as dictated by the same companies that created them. Most of all Tony believes in performance over hype and #PowerToThePlayer.

Tony Covey

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      Gene

      9 years ago

      Fundamental issue here is that the number of rounds played are down dramatically — and will continue to decline as demographics change. Just look at the number of course closures and mergers or consolidation of manufacturers since 2007. TMaG is no different than any other publicly traded business, and job #1 is maximizing value for shareholders. Unless they grow, public companies are deemed a failure (in the unforgiving light of capitalism). I spent time working at TMaG in the R5 / R7 halcyon days. Were the majority of executives people that you’d never socialize with, if it not for the job? Yes. Have decent and accomplished employees been treated like numbers and discarded to “align resources”? Absolutely. Is life not always fair? Unfortunately so. No matter what people think and want to blame, the golf market has forever changed. No amount of dazzling advertising, star power and innovation will turn the tide. The game, while beautiful, eventually had to peak. For the majority of consumers, it’s not a necessity such as housing, transportation or basic clothing (and all of these core markets have had woeful periods). It’s a shame that the golf industry and genuinely great people have had to pay for some of the manufacturers’ poor business practices and bloated product pipelines. But even big box retailers have recently said publicly that they are expanding their selections of other sporting goods and reducing their percentage of golf-related equipment and soft goods. This signals a new future, which may ultimately be a bit more sane in the long run. Golf as once played by the likes of Bobby Jones, Ben Hogan and Harvey Pennick still takes place today but mostly on municipal links away from over-hyped marketing campaigns, over-priced equipment and over-blown egos of some in the big-name brand golf business who created the illusion that you can buy a golf game. The secret is still found in the dirt. Honor, decency and goodwill of golf will endure with or without the companies that appear to have finally hit the limit of growth potential and relevancy.

      Reply

      Sid from aus

      10 years ago

      This situation has been brewing for a while and not just in golf. Product and brand life cycles are shortening and every one is looking for the next “it” brand and hence the rise of the no substance brand and death of the mega brand. TMaG was always marketing driven and with a sprinkling of product that once was innovative (r5 to r11) then became capable and now plain gimmicky.

      So it’s now TMaGs turn to reinvent and do something innovative and mind lovingly cool again…. Paint jobs won’t cut it, so so ball performance won’t cut it, bring something to the table more than fancy marketing. Bring a new way of doing business. Imagine subscribing to a club, pay $1000 a year and you get a Taylormade staff package I.e. Your choice of that years gear from bag to irons, wedges, woods, putter, etc….reward the retailer on the way through as well…. Try something different.

      Reply

      stogiesnbogies

      10 years ago

      The loss of jobs….with the likelihood of more pink slips to come is truly devastating to individuals and families as well as the entire economy since these former employees buying power will obviously by negatively impacted….and consequently hurt the economy as a whole.

      Such a pity that it appears Adams Golf paid the greatest price in terms of lay offs as Adams golf equipment was largely targeting the weekend warrior/ amateur player who was looking for ways to play better and enjoy the time they had to spend on the course.

      Unlike some OEM (such as Titleist for example) Adams always seemed to target the amateur player who just wanted to have more fun on the course with the often limited time available to
      him/her. For Example, The Adams A12OS irons and the newer “Idea” Irons are great clubs for weekend warriors, senior players and many women….hope that TM keeps the Adams lineup and simply relo the HQ ….definitely troubling times in the world of Golf Equipment…

      Reply

      theHacker

      10 years ago

      To me, the current state of the golf equipment industry can be simply summed up in one word – Greed.

      In their hunger for profits, they flood the market with one new product after another, with questionable claims of better performance – usually distance. Then they spoilt the market with discounts on older equipment that’s been left on the shelf.

      On the one hand, we have been fed on the expectations of steep discounts when the next new toy comes into the market, so many (most) held back their purchases. It has to happen that golf as a hobby is also going downhill, due in no small part to Tiger Wood’s declining fortunes in the Tour.

      The easier sad than done way out of the slump (at least in the golf equipment market), is to make golf a cool and popular hobby again. In particular appeal to new and younger audiences. This is the demographic that has a cool 20 – 30 more years of golf and equipment buying to go if they got hooked to this hobby.

      Old folks like me have at most 10 more years of serious golf before I enter my twilight.

      Reply

      Bullwinkle

      10 years ago

      This started out as a lark and wound up being an education, Tony if we can prove we read this whole blog -college degree course- can we get academic credit?

      I really did read this whole thing, and if Sally is a real TM wife, I feel bad for her. Being a cartoon character myself, I tend to figure everyone is Boris or Natasha in disguise so I sort of doubt she is whom she says she is, but as my old pal Rocky says, Bullwinkle Opinions are like posteriors, everybody has one, some stink more than others.

      I’ve been in golf retail a long time ago, would love to be playing now but have an ongoing injury (and old age) problem that gives me enough time to read the wisdom of others on here. Taylor Made was the biggest hog at the in the pen, everyone else aspired to be said biggest hog, in a pig pen or in life and business this is called life. Taylor Made didn’t act any differently than most other business segment leaders, and at least they are saying, “Hey we screwed up” and correcting their business model. The industry was due a correction, and since pretty much every one except Tony knew this was coming, we are undoubtedly in the presence of the largest collection of Millionaires in blogging history. I know if I knew for certain this was coming, I would have shorted Adidas Company’s stock as well as Callaways cause that’s what smart people would have done. But I’m just a cartoon character so what do I know!

      Reply

      Regis

      10 years ago

      Pretty obvious that many posters here are independent retailers or people in the vending chain. I like reading the posts because for the most part I’m learning about that end of the sport and the business. Having said that the future of the sport and by extension your futures are tied to the continued participation of the end user , meaning the consumer. So tell me how your non stop rants and rages about what a miserable devil TMAG is (here and duplicated on other sites) and how their products are crap is in any way forwarding that future. We get it- You “in the industry” are the Olympus of the sport. One knows more than the next about the inner workings of TMAG and their business model. One has more inside info than the next and that is why the other is an idiot. Newsflash- those “not in the industry” really don’t care who “is the King shit” and you are embarrassing yourselves. If you are that miserable maybe consider another line of work. We are still talking about a sport here, a game, for many a passion but that is as far as it goes.

      Reply

      RON

      10 years ago

      If anyone buys a TM driver in these stores that outa come with balls, shirts . shoes and a bowl of soup lol. I LOVE ITTTTTTTTTTTTTTTTTTTTT. LOL

      Reply

      fcruz

      10 years ago

      TM wreaked havoc in the retail channel, now they are paying for it. I know of many people that are p… off at TM for their greed and willingness to drop new products (even when the products have been generally good). People feel cheated when their new driver or irons are no longer “the new thing” in just 3~6 months. This is a sure fire way to DESTROY customer’s LOYALTY. These people do not feel sorry for TM or Sally’s husband. The greed of the marketing and management groups of TM are to blame, not their engineers or ops people. TM will be back in 2 years, hopefully will resemble more to Titleist. (I was a TM fan for 11 years, have gone to Ping).

      Reply

      Brian

      10 years ago

      There are very few, if any comments criticizing the ‘workers’, in fact we have great sympathy for the stresses they are experiencing. Who most of us are criticizing are the shareholders and senior executives who are misguided in their assessment of the economy and declining interest in golf. You cannot continually bring new product to market every 6 months in the current situation we find ourselves, it is just plain unsustainable. The big surprise is that Adidas Taylor Made is led by Mark King, who has consistently warned about the serious decline in golf play and spending, see the HBO video and his leadership of Hackgolf, yet they seem to be the leaders in obsoleting 6 – 12 month old clubs claiming major improvements with new product. Consumers aren’t that stupid to either believe it, or they will wait 6 months until that model is $200 off.

      Reply

      Sally

      10 years ago

      Mark King does not work for TaylorMade and I am referring to the senior executives who get the brunt of all the criticism.
      Think what you want, but it is not accurate

      Reply

      bill smith

      10 years ago

      Sally:
      Mark is so tied to TMAG. The senior executives you are referring too were hired or picked by Mark. He left them a challenge. They are and were handsomely compensated by him. They all drank from the same kook-aid barrel. Its time they take responsibility.

      Jerry Garcia

      10 years ago

      “Sally”:
      Don’t take blogs personal. Bottom line – the management team at TMAG knows one thing; golf, and what Mark King made them believe. Executives made promises to adidas and now they have to deliver. Most of the comments here are accurate. The current executives know very little about business. They only know how to push product on customers with a bogus marketing story. Mark can’t help – he’s too busy blowing up adidas NA.

      Sally

      10 years ago

      As someone that is closer to a TaylorMade executive than any of you will ever be, I can guarantee that, I would advise to think before you speak here on this blog. Your harsh words and senseless comments made out of ignorance do nothing but further stress the employees at TaylorMade when they read about the reaction to the necessary cut back in employees. What you write in 5 minutes and then forget about an hour later shatters the day of the people that work their asses off every day at TaylorMade to imporve the brand and get it back on its feet. None of you have any idea the time, stress, and effort that the executives at Tmag put in on a daily basis, and bashing the brand and the product does nothing positive for anybody.
      You may think you know about what happened, and what is happening at TaylorMade, but you have no clue, so think before you write.

      Reply

      mnfats95

      10 years ago

      Sally,

      Everyone is entitled to an opinion. It happens to be the opinion of many that TaylorMade is hurting more than helping. While most of the comments are based on what the public sees and the perception of the brand, it’s still a fact that there are many people who feel this way.

      You are correct in stating that most of us don’t have a clue what the day to day is like at TaylorMade, but that doesn’t mean we can’t have an opinion on how we feel they are affecting the golf industry with their policies and actions.

      The fact that the company is having to do what it’s doing should cause much more stress and worry for it’s employees than anything people on the internet say. If it bothers the executives so much then hopefully they will do something about it.

      Criticism is a fact of life when it comes to putting yourself or your product out for sale. You can’t just tell people to stop criticizing something, make them stop by fixing the issue.

      Reply

      Sally

      10 years ago

      They have been working tirelessly and continue to do so.
      Yes, everyone is entitled to an opinion, but the majority of these responses are out of ignorance and a bias toward another golf company.
      You can’t wave a magic wand and make issues go away, and this is not just a Taylormade issue, it is an industry wide, and even broader, country wide issue with the economy and people forced to only buy the essentials when they are on a budget. It is an uphill battle, and it’s easy for people to sit behind their computer and criticize, they are not the ones putting in 12+ hours a day of work and work on weekends.

      mnfats95

      10 years ago

      Being a veteran of the internet since it’s inception, the best advice I can give is to ignore it.

      Some of it may be true, some of it may not, but if it bothers you enough to cause real stress then I would simply stop reading it.

      Otherwise I would turn the comments into motivation. Just like a pro sports team will post negative articles in the locker room for motivation, use the comments as a way to motivate the company into proving them wrong. Nothing gets most people to do their best like telling them they can’t.

      In 3 years the company could again be the toast of the industry if they make the right decisions and then everyone involved can feel great about themselves, but it will never happen if they let things like internet vitriol affect their attitude.

      bill smith

      10 years ago

      Sally:
      Stop whiney.
      How long have you been drinking the kook-aid? Have you bothered ask why is everyone working so tirelessly? Why are they working 12+hours a day and weekends? You are following an outdated business strategy.
      The business strategy implemented by Jim Stutts/Mark King no longer works. It is easy to launch a new product and determine sales revenue for a short period. Its called sell in. What TMAG cannot predict is sell through. So what does TMAG do? They launch new products every 6 to nine months. Think car industry business strategy but on steroids. It no longer works because your competitors have caught up with you. Time for management to go back to school. Layoffs of non-management people are not going to solve the problem. Good luck with your 12 hour days drinking the kook-aid and raising medallions a night!

      Sally

      10 years ago

      And who are you “bill smith” or who do you think you are at least?

      AWOL

      10 years ago

      Sally,
      I feel for you, obviously a lot of us don’t know what a day is like for employees working for TMag. As one who defends TMag all the time i can assure you, i myself have been targeted against some “haters” in this blog. Unfortunately and undeservedly TMag has been deemed the new anti-christ or something like that. This however is a blog so people are entitled to write their opinions however unjust they are. It is up to the people with some sense to sort the shit. It sounds like you might be the wife, sister or daughter of a TMag executive, maybe to reassure the consumers they could release a statement with more specifics and i don’t mean a general beat around the bush corporate statement. People don’t want to hear words like “maintain integrity” and other non-descriptive nonsense. Just have them come out and say whats going on. The worst thing TMag could do right now is sound like one of the dumbass politicians we elect.

      Reply

      bill smith

      10 years ago

      TMAG is the “victim” of its on business strategy. All golf manufacturers are following them. Now its time for TMAG to develop a new strategy. Mark King can rest on his laurels. He did what it took to make TMAG successful. Just like products have life cycles so do companies. Its time for TMAG to re-invent themselves. Can the current management team step up?

      Jim

      10 years ago

      Don’t feel sorry for TaylorMade or TMaG employees. I recently worked there and can tell you that the employees leave early almost every day, especially on Fridays the offices are empty by 3pm. They have a summer program where everyone leaves by 2pm. The rest of the time they take long lunches, go to secret, off-site “teambuilding” golf resorts with free lunches without notifying other departments, have week-long Sales conventions at La Costa resort where every office worker is invited. They just don’t work hard. Now the production staff on the assembly floor, shipping, receiving, repairs, warranty, etc. work very hard!!!!

      Another reason not to feel sorry for TaylorMade employees is that many of them act like white gangbangers if you don’t fit with “their kind”. I was able to “jump in” with the group but saw very talented people severly shunned and forced to quit under duress. They basically made their lives hell for no reason but to satisfy very ugly personalities that I call “workplace assassination”.

      One more reason (there are many more) is that they just make really stupid business decisions. They outsourced their IT work to the Ukraine (who the heck does that?) and an opposite work-hour timezone, and invaded by Russia. How’s that working out for you? The shopping site would go down at 8am and the Ukrainians were at home, having dinner. They hired the Ukrainians after they fired the original American consulting firm who launched their eCommerce site, THE DAY AFTER GO-LIVE. Really, don’t feel sorry for the employees nor executives. They pat each other on the backs for being stupid and while working 30 hours per week and getting paid for 40 hours.

      O. Jones

      10 years ago

      Sally you are on the wrong blog! Who cares if you are closer to a TaylorMade executive than any of us will ever be? What does that mean? Does your TM executive have to work for his salary? Was he part of the team who churned out new clubs, flooded the golf channel with no charge golf clubs to leverage the Adidas apparel business?

      Here’s what I know, many, if not most of the people commenting on this blog are CLOSER TO THE GAME OF GOLF than you will ever be! Does your “TM executive” still have a job? I have friends who work/worked and laid off from TM, Adams and Callaway, I can assure you they work harder, are under more pressure and get paid much less than your executive.

      Think before you whine.

      Reply

      blstrong (SeeRed)

      10 years ago

      This cuts close to home. I left the home building industry in 2008 after working for a great (and at one time, very highly profitable) division of a nation-wide home builder. Then the cuts started happening, and it snowballed quickly. I’m not trying to draw any comparisons between the golf equipment and home building industries, as they occupy very different rungs on the priority ladder. However…the adjustments, realignments, downsizing- call it what you want- that happened then are likely about to happen now at golf equipment companies it seems. I can tell you it is no fun and I feel for those involved at the “worker” level. CEOs and VPs with six-figure salaries are better positioned to weather such a storm than the $35,000/year guy or gal who is more likely to be cut from the “team” first. Hopefully those who many of us believe have been playing it a bit smarter (PING, Titleist, Mizuno, etc.) will weather it a bit less painfully. There ought to be some reward, however small, for sticking to your guns and being a better team player overall, while also meeting your business goals.

      Reply

      Brian

      10 years ago

      Tony and other contributors, thank you for your excellent discussion.
      Surprised that nobody has mentioned the huge sums paid to PGA Tour players for their endorsements of everything from clubs to socks and these huge contracts undoubtedly contribute to a significant percentage of a product cost. Surely these guys are going to see a big cut in their income when current contracts expire. Advertising and marketing of golf gear will surely be reduced to cut costs. By the way that was an excellent HBO article by Bryant Gumbel on the Future of Golf. One golf course closes every 48 hours.

      Reply

      Tony Covey

      10 years ago

      Brian – For gearheads like I us, I think the Tour endorsement spend is hard to wrap our heads around. Most of us don’t care what tour guys play (at least we say we don’t). I *think* our perspective is very different from the average (majority) consumer. The tour remains firmly atop the pyramid of influence, and while it may never make sense to me, I believe the tour itself, or at least the ability to make claims based on tour presence, still has the greatest impact on a company’s bottom line.

      ProV1 – #1 Ball In Golf (and on Tour)
      TaylorMade #1 Driver in Golf (and on Tour)
      Adams (not sure if still true, but was #1 hybrid on tour and was known for hybrids). Correlation is unquestionable.

      Interesting footnote to all of this…I was discussing possibility of layoffs with a highly-placed industry source. One of the things we were talking about is where a company could and would cut costs. What he told me was telling; “I would never cut my tour spend”. Obviously you can never really say never, but the point is that companies will pull funding from nearly everywhere else before cutting tour sponsorship.

      Safe bet they’ve done the ROI studies, and know something most of us have trouble believing. The Tour really (really, really) matters.

      Reply

      labillyboy

      10 years ago

      All I have to say is the economy is horrible, much worse than the government wants us to know.

      As a guy who always bought a new stick every couple of months, I haven’t bought anything in over 3 years. My business is down so I’ll just make do with what I have. The golf industry will turn around when we get a new approach to the economy from Washington DC.

      The Adams closure and decision to move it reminds me of Hogan’s demise when Bill Goodwin and AMF bought the brand and closed down it’s Ft. Worth roots moving it to Richmond, VA. Quality died, innovation died and the subsequent Top Flite purchase doomed it to the trash heap of once top line equipment brands. This is the beginning of the end for Adams.

      Reply

      Fozcycle

      10 years ago

      Receive a Free Dozen of Tour Preferred Golf Balls!

      Dick’s is now offering free TM golfballs if you purchase a SLDR……from earlier comments, Dick’s made very little profit off the TM golfballs….so I guess they figured they could dump them with the drivers.

      Reply

      Leo West

      10 years ago

      TM started the bull*hit with the R11 and R11S. This was a marketing hocus-pocus. It was nothing more than an empty sardine tin with a shaft. And it sounded like one too. Buy Titleist or Ping. The rest are just impostors. I will NEVER spend a penny on anything else. I paid the schooling fees, have the T-Shirt and learned my lesson for sure. Golf branded clothing and shoes are the next big ponzi scheme to implode. With all the new, better and longer distance equipment flooding the shops, magazine – and TV ads weekly, they just admit the the previous wonderful model which was by the way also longer, straighter more forgiving and better in fact were not as advertised. Putters today are more than a joke.

      Were were the days when a player played 10-20 years with a putter – because it worked.

      Do these manufacturers think the buying public are so stupid that we cant see that they try to sell a $5 golf shirt, made in Asia for $80 + ? And then it is made of synthetic materials!

      Indeed golf is in a serious bubble, including professional golf. You cant find a bigger gaggle of prima donnas than those flocking the fairways of professional golf. ( the English soccer team excluded)

      Golf is a dying sport. The industry, the greedy developers and snobs playing of a 24+ handicap is to blame.

      With all the wonderful, more forgiving and longer clubs available the average handicap is the some if not worse than many moons ago…and the same number of balls find resting places in the bushes.

      In my 35 years of playing the game the average man sit can’t hit a green in regulation frequently despite the forgiving and better clubs , still ends up with plenty 3 puts despite $ 400 putters, and visit the bushes regularly after faded and snap hook drives from the most beautiful fairways and T’s.

      Its the Indian at fault not the arrow. Rather spend $ 400 on training than the bull that is dished up today.

      TM and friend rest in peace.

      Reply

      Fozcycle

      10 years ago

      So as the article above states that “15% of the golf division’s global workforce, including what I’m told is a majority of Adams Golf employees, has been laid off.” I heard on the radio today (PGATOUR Sirius/XM Radio) that this will be 90% of the Adams Golf employees. While I have no idea how many employees Adams Golf has, 90% sure seems like a lot.

      Reply

      Tony Covey

      10 years ago

      Glad to see some decent sized media outlet has picked up the story. Inexplicably both Golf Digest and Golf Magazine (golf.com) are apparently pretending this isn’t happening. At least the former as PGA WAGs on the front page, so there’s that.

      As to your question…Adams was definitely hit very hard. Basically, if you worked at Adams and your job function can be readily assumed by someone else at TMaG HQ, you’re out of work. Things like finance, HR, IT, etc. I would guess would be on that list. Product and marketing managers…those are the types of jobs that would carry on.

      TaylorMade reps are thus far being cagey about specifics. Numbers I’m hearing are 200-250 heads. TaylorMade is ~1200 or so in Carslbad, but I’m not sure what the total number is globally. My sources have been 100% accurate both in terms of speculation and reality on this story, and what I’m being told right now is that these cuts aren’t enough. The probability is there will be more blood.

      Reply

      O. Jones

      10 years ago

      Would employees in the international markets be Taylormade employees in the Adidas Sub office? Adams took the biggest hit – that was an easy choice and the lowest hanging fruit. First passes are easy, 2nd passes require more analysis…

      daz

      10 years ago

      What about the company that has won more majors than any one else,Wilson Staff are you all saying they are in trouble also because they are part of the golf industry.The motor car industry mentality is exactly the same,new model,new model,every 4 to 6 months but not Rolls Royce how many people are driving old Rollers,heaps,how many golfers are using 4 to 6 year old drivers,no way have to have the latest to get that extra 3 yards They all get you involved in the hype and then they live off you.How many Rolls adds do you see on TV every day? The marketing companies have ruined the golf industry,by encouraging the golf companies to give us another product to market, we wont some bucks to

      Reply

      Giles

      10 years ago

      The reality is that within the markets; Consumer Discretionary Industries and Sectors have failed to even moderately keep pace with the S&P 500. Taylormade definitely has made marketing and sales blunders – one after another over the past several year. But when put it into perspective Taylormade/Adams/Addida didn’t fare dramatically worse than mean in that broader sector of the Consumer Discretionary market (http://www.yardeni.com/pub/peacockperf.pdf). You can go through and find some jewels, but the S&P is an aggregate.

      Some idiot suggested early that the Driver would have to cross the $500 price threshold for golf companies to be successful. All of the market data suggests that if a golf company tried something like that they would bomb hard. People are spending less money in the Consumer Discretionary market. Trying to force a more expensive club into the market and pray that it will be the savior is to misunderstand how one finds success in selling production goods in a tertiary market. The final price of a good has relative little importance to a company and their share holders – profits do. If you can put out a better than average club for $200 and make $100 in profits for each unit sold that is better for the company than putting out the absolute best driver for $500 and making a $5 profit per unit. Furthermore, the American people will always have a limit they won’t cross when it comes to their discretionary dollar.

      The reality is that Golf manufacturers are probably going to need to produce brand loyalty through physical golden hand-cuffs – possibly through a removable nozzle allowing you to use the same shaft for several years while heads improve or vice versa. Who would’t get the newest set of Mizzunos if the set of heads costs $299 and you can change the shafts for a nominal fee or for you diy’ers in your shag carpeted living rooms. Another possibility for golf brands may be some kind of technology that is proprietary to one company and can’t be transferred to other brands. But I have no ideas here.

      I would look to how Canon and Nikon won out over other quality camera challengers like Minolta in the 1990’s. Once you have several hundred dollars in lenses and flashes other brands aren’t even an option.

      Some Ski-boot companies charge outrageous costs for custom vacuum sealed inserts. I have a friend who spent a huge amount years ago and has only owned that brand each year because the soles only flick into place within that brand. I don’t ski so my knowledge here is slight. But may companies creat custom grips on shafts for an expensive fee teaching a proper grip while accommodating all hand sizes. To change from one company’s shaft contractors to another could be very very expensive. Just an idea.

      If I were a golf company I wouldn’t try to get golfers to spend more of their discretionary dollars on this years models. I would seek having them spend less money more frequently through some kind of physical reality that forces them back into your brand.

      Reply

      Tony Covey

      10 years ago

      Giles, Welcome back…glad to see you again. Allow me to introduce myself, I’m the idiot you referenced…or at least one of them. You do realize you can make a point without resorting to name calling, right? We’re a golf site, and golf is a gentlemen’s game, no?

      Fortunately for all of us, I love the parallels to the camera industry, so let’s start there. I know where you’re going, but if you want to draw a direct comparison, you’d need to split the roles of Nikon and Canon between TaylorMade, Callaway, Titleist, PING, and Nike (their dominance of the soft goods market greatly elevates their position when you look at total golf revenue). Minolta (now Sony)…Cobra, Adams. Finally Pentax, Cleveland, Mizuno, Wilson, Bridgestone, Tour Edge.

      The problem with the analogy you’re making is that for every 1 serious to marginal player in the camera (DLSR bodies) market, you have 2-3 in the golf industry. Nikon and Canon are the leaders, but they did not, as you say, win out. Pentax and Sony both enjoy measurable market share. The level of competition is much greater in golf, and there are for more categories where companies compete (wedges, putters, apparel, balls). You have leaders in golf, but not to the extent that two handfuls of other players can be ignored.

      If you want, cast Hopkins Golf and other similar emerging models in the role of Tokina, Sigma, etc. (low cost quality alternatives that not every consumer is fully receptive to). Point is…without further consolidation, golf and camera aren’t really that close (in this particular analogy).

      I’d also point out that, unlike golf clubs, prices of camera equipment have steadily risen over the last two decades. The lens market is a fantastic example. I think we all would agree that the primary purpose of a camera lens is to take a sharp picture. Over time, the cost of lenses has gone up. You can argue that the cost is justified by things like Image Stabilization (Vibration Reduction), but in many cases (see numerous lens tests) those bells and whistles often come with diminished image quality (compared to the previous model), and even when they don’t the basic function (take a sharp picture) is unchanged. Because of the bells and whistles, consumers are willing to pay more, but the bottom line is, prices have risen. Even with just basic – it’s time for a new model type upgrades – bottom line consumer prices continually rise. Cameras, for the average person, are no more necessary than golf clubs.

      If you want to argue that the technology of golf is no different than it was 20 years ago…or even 10, you’d be wrong, but for the sake of argument…the spatula in my kitchen drawer is functionally, and likely compositionally (still plastic) the same as it was 10 years ago. It almost certainly costs less to produce. It’s a tool (and while we’re at it we should look at the comparative cost of hammers as well), and on a percentage basis, it costs me substantially more than it did a decade ago. This idea that golf clubs should be different (because $400 is a lot of money…so is $2500 for a camera body), borders on preposterous. If the consumer wants something he will pay for it…and he’ll pay what it costs. Yes…he’ll upgrade less often, but that’s anticipated and baked into the cost.

      As far as your notion that golf companies should seek to have consumers spend less, more often; you’ve just described the rapidly failing model that led to this current debacle. Why do you think the industry invented the $300 driver (remember…almost everything was $400 until less than a decade ago)? Why do you think the discount, net down, release the new model thing emerged? Golf companies figured out that they could increase sales by selling you one driver a year instead of 1 every two years. Even with discounts, they still came out ahead. After years and years of it, consumers got wise, stopped buying full price clubs…and so we’re exactly where we are today. The model you’re proposing is exactly what failed.

      If I’m reading your thoughts correctly (and do correct me if I’m wrong), you are hinting that golf companies need to make a greater effort to build brand loyalty. I think Titleist and PING have inadvertently succeeded at doing just that (to some small extent anyway), simply by remaining loyal to the consumer (and the green grass retailer). Golfers know neither company is going to explicitly devalue what came before it, so there’s security in knowing that what you buy today will be good for 1.5 to 2 full years. It also helps that both companies treat their retailer partners the same. Neither gives price breaks to big box, high volume business. Dick’s pays what your local pro pays.

      Other things like frequent tip adapter changes (Callaway is working on a new one) do little to build loyalty (thanks…now I’ve got 5 shafts that don’t fit anything), and so given that (I’d call it a failure), your head only idea (which I like) is of little practical value unless it’s accompanied by a very modestly priced (or better yet free), tip swap program.

      Of course, worth a note…we’re just a couple of gearheads talking about what would be perfect. The reality is the average guy isn’t sitting on a stockpile of tipped shafts, but that doesn’t mean you can’t offer a head-only consumer program for those of us who are.

      But absolutely, brand loyalty is almost non-existent in the industry. Whatever TaylorMade had is gone. Callaway (fair or not) has very quickly been lumped in with TaylorMade in the current mess, so I think that ultimately hurts the work they’ve put in over the last couple of years. It’s better to be Titleist and PING right now, but even for those guys, from a loyalty perspective, they haven’t accomplished anything ground-breaking.

      Regarding my idiocy and the $500 driver…it HAS to happen. Most companies will shift towards something akin to the Titleist model (more controlled predictable release). Of those who really register in the industry, only PING is privately held, so they have some cushion the others don’t. If we look at the issue through the eye of shareholder expectations, the goal is pretty simple; at absolute worst it’s maintain profits, but the expectation is always to grow profits. Today should be better than yesterday, and tomorrow better still.

      Read the comments in this thread. To grow profits shrinking your own wholesale margins isn’t an option. Product costs can’t be reasonably cut further without sacrificing quality. The difference from rising production costs has, for the last decade, slowly come out of the retailers cut. Those guys are now to the bone. The only way to make selling golf clubs viable is to raise their profit margins. The only way to do that (without sacrificing OEM profit margins – which is unacceptable for publicly traded companies) is to raise consumer prices.

      This will become of greater importance in the new business climate where fewer units solid mandate higher profit margins (again – because profitability of publicly traded companies is not something that can be sacrificed). Instead of selling you a $200 (discounted) driver once a year with next to zero profit margin for anybody involved in the sales, it’s going to be a $350 or $450…or $500 every two years with a much more substantive profit margin.

      Want an example…look at Callaway’s Apex iron lineup. By conventional standards, they’re already over-priced. Margins for Callaway and retailers are good, and the consumer is willfully paying the price (at one point this season was the #1 selling iron in the market).

      Call this my opinion if you want, and tell me I’m stupid for even thinking it. Argue economics and why you don’t believe it makes sense, or why it would drive the golf companies out of business, but as I’ve been fond of saying lately…come back in 18 months and we’ll see what the market looks like then.

      Finally, regarding shirts. At the risk of sounding flippant, I can usually make a reasonable guess at a reader’s age based on the association drawn between quality and natural fibers. Give me cotton or give me death. It’s silly. Before anyone flies of the handle, please allow me to try and shed some insider light on what many think is the biggest rip off in golf.

      Yes, golf shirts are expensive. Shirts also help to balance the market. You don’t want driver prices to go up, but you also don’t want to pay $75 for a polo. Has it occurred to you that it’s unrealistic to have it both ways? To the consumer what looks like a scam is in part how golf shops stay in business in spite of substantially diminished margins on hard goods. Margins are high on apparel, and they need to be in order to make club sales viable. We’ve got proshop guys reading this thread, and my guess is most if not all will tell you that there’s more money to be had selling 3 shirts than selling 1 driver. Without those apparel margins, they can’t afford to sell clubs.

      I think the other thing that’s misunderstood (or not even considered) is the amount of R&D that goes into making today’s golf apparel. As someone who has seen it firsthand, let me tell you, it’s insane. Breathability, moisture dispersion, material weight. It’s incredible what golf companies are doing right now. If you want them…dockers is still making natural (cotton) polos, but there is no comparison to a modern (synthetic – OH THE HORROR!!!!) golf shirt. In this particular area you have no idea what you’re talking about. The research that goes into something as apparently simple as seam placement alone would blow your mind. That’s before we start talking about how and where a shirt stretches and moves throughout the golf swing. It’s crazy how manufacturers approach what most take for granted.

      You want real advancement…compare an adidas or nike golf shirt in 2014 to one from 2009, the differences are incredible. Yes…there are some *lifestyle* brands who work of the perception of trendiness (let’s call it the lifestyle vibe), but with the top brands, you get what you pay for and you can do so with the knowledge (for better or worse) that the retailer actually makes money on the deal. Quite frankly, I don’t think there’s much wrong with that.

      Reply

      HackerDav31

      10 years ago

      Giles = Pwned. Well written and thought out Tony…

      O. Jones

      10 years ago

      “Golfers know neither company is going to explicitly devalue what came before it, so there’s security in knowing that what you buy today will be good for 1.5 to 2 full years. It also helps that both companies treat their retailer partners the same. Neither gives price breaks to big box, high volume business. Dick’s pays what your local pro pays.”

      You cannot possibly believe this. Nothing could be further from the truth.
      Or are you stating this is your idea of a fix to the situation we retailers now face?

      Walmart , Dicks, Golfsmith, etc. have 200+ page vendor agreements (all big box businesses do). If this is your belief, is it also your opinion Dicks Sporting Goods would not negotiate for a larger discount, both off invoice and in no charge product, to be able to crush the green grass channel?

      What Dicks Sporting Goods, Wal-Mart, etc. does with these higher discounts has nothing to do with may

      fozcycle

      10 years ago

      Check this short story recently done by BryanybGumbel……

      https://www.youtube.com/watch?v=QFEYC4Z44v0

      Reply

      RAT

      10 years ago

      Kudos, Bill Smith !!!

      Reply

      Harv

      10 years ago

      How many people are we actually talking about? 15% of the golf force that comprises of how many people?

      Reply

      dg7936

      10 years ago

      Overdue but unfortunate; Adams was marginal after breaking open the hybrid market 20 years ago. TMade is like GM, all money no brains and too many managers. If they really slow their product intros to annual events and deliver meaningful improvements they may regain some respect. If Callaway follows the TM path and slows down then we’ll see legitimate product cycles and normal margins again.These two companies set the tone, all the smaller firms have to chase them to keep up. Good timing for Wilson, Hogan’s reintroduction and other small firms who never really moved as fast as the two big players. Maybe these small guys will steal some market share.

      Reply

      Oliver Jones

      10 years ago

      When will the next Callaway Driver be released? Will consumers pay a premium price? Do consumers even know about this war of OEM’s? Do they care?

      Reply

      Golfer Burnz

      10 years ago

      How does that “Glory Days” chorus go again? Something about, in a wink of an eye…

      Reply

      ronno

      10 years ago

      i was tm consumer for years but swiched to titleist first of year because every time i bought any equipment 2 months later its outdated and something new came out.i know it doesnt matter irons is a irons but it bothers me

      Reply

      golfpro

      10 years ago

      Everyone is “sad to see the adams hq shut down”. But If anyone had actually purchased an adams product this year they likely wouldnt be closing.

      Reply

      golfercraig

      10 years ago

      Hey, no need for facts here. Just whining and bitching.

      Reply

      Ripadams

      10 years ago

      Actually, Until 2014, Adams was always one of the few…I’m mean very few hard goods company’s that actually posted a profit each year! And was also one of the few company’s that showed steady growth over the last 10 years. Most of the big boys take a loss each year. Those are facts and you can look it up. It took less than a year and a half to break down what had been growing for years. Your the same guy that just discovered the hybrid.

      golfercraig

      10 years ago

      No. You’re being fooled by accounting tricks and insurance write-downs. I’m the same guy that just discovered the hybrid? I promise you I’m more privy to what is happening in the industry than you if you are claiming a profit every year. I was in meetings with Mr. Adams discussing profit and retail strategy. I was in meetings where TM was discussing the actual amount they were willing to pay to license the slot technology (NO!!!!! They did not buy Adams to avoid a lawsuit. They had the right to use it, and were paying a per unit fee. The fee was going to be higher than the purchase price for Adams.) You? I think I already know that answer.

      Steve P

      10 years ago

      golfercraig,
      You are full of sh__.
      Barney Adams had been pretty much hands off on the company since before 2008.
      Chip Brewer would have been in ANY worthwhile meeting discussing profit and retail strategies with an account that had any relevance to Adams being profitable. & Adams was making money before being acquired for 3 years running. AND gaining market share at a respectable clip.
      Adams had NO utility patents on slots… my research (posted in other topics) suggests that Titleist (Acushnet) has the patents. No lawsuit was ever even thought about between Adams and TM.
      Adams was a $100 million a year public company purchased for around $70 million. THAT’S A FRIGGIN BARGAIN.
      That’s why they were purchased. Purchased by a company that couldn’t crap out RBZ woods fast enough to keep up with demand, and thought they knew it all.

      Well… we all know now that they’re not nearly as smart as they thought they were 2 years ago. And the rest of the industry knows it.
      And I’ll say it again… I knew from minute one that TM would screw up a growing brand in short order, and I was right. RIP Adams Golf.

      MikeB

      10 years ago

      Hey golfer craig… who died and made you king?

      O. Jones

      10 years ago

      Hey MikeB – who died and made you the judge of the blogs?

      Golfzilla

      10 years ago

      Actually, I did buy a set of the new Adams Idea “irons”. They performed up to their marketing pitch and I am a happy golfer.

      It will be interesting to see if TM actually kills the brand.

      Reply

      Stan Petty

      10 years ago

      Wonderful article s difficult subject made easily understood. Helps me with several decisions on equipment purchase.

      Reply

      AWOL

      10 years ago

      That really is too bad about Adams. This makes me even more mad about this stupid Callaway launch coming up. Are they planning on ignoring the issues in the industry and think they will rise to the top. Their new launch is almost like a slap in the face to the consumer and golf industry. I foresee PING, Cobra and Titliest sales increasing. Honestly it is probably well deserved even though i have a lot of TMag equipment i’d rather see people playing PING and Cobra.

      Reply

      MikeB

      10 years ago

      11 rounds ago I switched back from the 2011 Cobra S3 irons to the 1998 Callaway Big Bertha Gold irons as My golf game was atrocious! The Callaways not only proved to be better, but they reduced my scoresd by 9 strokes! No more buying into the industry hype that newer is better. The smoke and mirrors of longer, more forgiving, etc. leave me cold now. The golf companies spend millions on R&D each year for what? Because writers keep saying irons should be closer to blades, be more compact, have thinner toplines. The BBG irons are perhaps the ugliest irons made according to what reviewers think is optimal but they work! Maybe golf companies should be mor consumer friendly and less reviewer centric and then they would sell more clubs! Think about it for a second… a 16 year old club design that betters a 3 year old one! Try finding today a true maximum game improvement club that is the same size and has the same topline thickness as the old Callaways, you won’t find any. think reviewers have far too much influence on the golf industry and companies have to start building clubs that truly help make the game easier and more fun.

      Yes, their release schedules have been ridiculous, but they keep releasing the same things over and over again. There have been far too many repetitive cycles in golf equipment. Examples include low profile clubs (check out how shallow todays fairway woods are), they work fine on manicured fairways but try using them off the tee or in deep rough and see what happens! Flex grooves and channels, Wilson had that way back in their Reflex line and what I find is any part of a club that flexes may give yopu an extra couple of yards but with the price of less accuracy.

      My last rant is the price of clubs and anything related to the golf industry for that matter. Why is a driver with no true moving parts or any electronics in it worth the same or more than a home theater reciever or a 32″ television set? Come on… get real!

      Reply

      Jerry

      10 years ago

      Things like this are a matter of math. The game isn’t growing. There are a million reasons why but there are still about 30 million golfers in the US I think and that number can sustain a lot of business. The golfing demographic is among the top groups in education and income and it’s not going away anytime soon. But as these club makers have just realized there “is” a wall that can be hit at 30 million. To make their ever-increasing production numbers each year obviously requires a growth curve that’s not there. Either they adjust their business models or we figure out how to attract new golfers like kids and women or modify the game to allow faster play.

      Reply

      Largechris

      10 years ago

      This ^^^^ 100%

      Unless more people come into the game, golf retail won’t grow.

      Secondly, in that annual report (seems to refer to group gross margin rather than TM but probably same idea) the Gross margin is 49%. No surprise at all, at the very least that 300 dollar net SLDR had a factory gate cost of 150 dollar. Well I think 40 dollars is probably closer to the mark but I wanted to go off the published figures.

      Most of that 150 dollar Is going to marketing costs eg sponsorship. And I don’t feel the need to support tour golfers buying more Lamborghinis. So it’s eBay and year old product for me.

      Reply

      Dave

      10 years ago

      Quick question, are the new drivers and irons really any better than 10 year old sets and clubs. IMHO —–NO! I am playing 12 year old Callaway Irons and a FT-IZ driver that just kills the ball, granted I am only an 8-10 handicap but the new stuff is all flash, I just bought a used SLDR driver played one round with it and sold it. (thank you E-bay)

      I tried the New Big Bertha Alpha and the Optiforce, same result no better than my 4 year old Ft-Iz driver, these cut backs are a parring of the poor economy and to much marketing and rehash of old ideas/ patents. If anything shines through to sales it will be Tiger, Rory and Phil’s sticks that catch the eye of a few with dollars. Dave

      Reply

      BrianS

      10 years ago

      They’re not significantly better than things that are maybe 3-5 years old but put them on TrackMan and you’ll quickly realize stuff that is a decade old is definitely inferior at this point.

      Reply

      The Hammer

      10 years ago

      Maybe you don’t have the swing speed for the sldr. It is the longest driver I have ever hit, just not the consistently longest but I will tell you that my new tour edge exotic kicks the crap out of my old ft iz tour as does the ping g30 which spins significantly less. Can’t fight physics. But if you get optimal numbers with the FTIZ don’t change, it was the straightest driver I ever hit, just spun to much so it was 20 yards shorter than some newer drivers. It is all about the holy grail of right launch and spin with a look sound and feel you like. Get a driver with those attributes and hang on to her.

      Reply

      lee

      10 years ago

      Some truth to that even with new equipment. Was playing RBZ Tour. Hit a friends X-hot,
      stock shaft, better sound, more consistent. Got a X-2hot. Had pga fitter & pga pro at golf
      course where I work put me on launch monitor at the range. Result, Xhot driver head, X2hot
      Aldila shaft (had to get new xhot shaft sleeve). Better launch angle and spin rate. Finally replaced my TM 200 steel fw metals with x-hot. good to go for another five years.

      fcruz

      10 years ago

      I used to buy TM religiously for years; I used TM TP 510, R5, R7, two others before the R1, R1S and the SLDR, I had it. I’m permanently off the TM wagon. I used TM TP irons every year, I now play S55 Ping/G25 woods. No more changing every 9 months. I hope the golf industry crashes, burns and overhauls itself, it is just too fat and I will no longer support it. I will spend my disposable cash on green fees instead. I’m even using cheap balls (E6, no more Pro V). From now on I will buy equipment every 24 to 36 months (F… them).

      Reply

      DBS

      10 years ago

      I knew this was coming, it was just when. The saturation in the market by TM and Callaway, to see who can produce the most clubs (i.e. – Drivers), would eventually take its toll. Competition is great, but mass release in one season after another w/o real “significant” changes (other than cosmetic) eventually will backfire. It’s too bad Dick’s bought into it!!!!! I wonder what the “think tank” @ Callaway is doing?

      Reply

      Jean

      10 years ago

      Finally…the upward spiral of costs and bi-annual product introductions were bound to stop. My
      quality Wishon clubs vintage 2006 are still able to keep me competitive, distance and performance-wise. Because of shorter product cycles, huge inventory requirements, the club
      pros have difficulty competing with the big box stores and that is a shame. The industry brought this upon themselves and that business model was insane and not consumer friendly.
      Hopefully there will be further downsizing at the manufacturer level in order to make golf affordable for the masses and help the game stop its’ downward spiral.

      Reply

      BrianS

      10 years ago

      For the record, as an off course golf specialty retailer I can tell you the reason the club pros can’t compete is because most of them are terrible businessmen. They have little to no education or practical experience in retail or how to run a business properly.

      Reply

      Dean Dodge

      10 years ago

      And did I just see they came out with three new putters? Remember when Ashworth was a respected and top quality line? I personally just had a fitting with a new Ping G-30 and will do the same with new Titlelist–then decide for myself–remember – “if it seems too good to be true, it probably is” – a saying readily applicable to Taylor Made new offerings seemingly every couple of month.

      Reply

      Jon

      10 years ago

      I’m not sure why anyone would buy a TM product anymore. After the launch of the R1, Black R1, SLDR, RBZ, Jetspeed, SLDR S (colour options), mini-driver, driving iron etc etc, I take the view that I’d rather opt out. I had the R1 and liked it. Now I’ve switched to Ping and plan on no change in the next 3 years. I unliked TM because of the constant change. They need to reconnect with reality.

      On Adams, didn’t TM get what they wanted already? The speed slot that TM’s dropped into pretty much everything. Wasn’t that what they wanted. Now they just need to integrate the Adams hybrids and they can ditch the brand and all unnecessary clubs surely. Shame but consolidation has to be the TM response to this earnings disaster.

      Reply

      golfercraig

      10 years ago

      You know, you could have just kept playing the TM and not changed, but then you couldn’t bitch about it all over the internet.

      Reply

      Owen

      10 years ago

      I am really getting tired of TM crap. They need to really stop flooding the market with crap every 5 months. Someone posted this earlier but the only way golf companies can even conceive selling clubs at their current prices is to stretch the life of these clubs. Maybe release something every year and a half instead of every 8 months to a year.

      Reply

      Dan

      10 years ago

      Let’s not put all the blame on TM. Callaway has a lot to do with this also. They come out with the new Big Bertha and then out comes the V series within months. They bit off more than they could chew in this economy and the regular comsumer can’t keep up anymore. IMHO these two companies have created the problem and I hope it doesn’t turn into a wildfire but, it appears it has. I usually play a driver for about two years before looking at new ones not two months and I believe a lot of golfers do the same. The market was flooded by TM and Callaway so, we all should have seen this coming. They also charge more per driver. I got my Cleveland Classic XL Custom for $299 new not $400. It is as good as anything TM or Callaway has out plus Cleveland has only come out with 1 new driver since I bought mine last year. TM and Callaway have come out with two or three new ones in that time so, of course they have inventory everywhere. I think the companies that keep prices reasonable and come out with new a new driver or irons once a year or even every two years like Titleist will fare better than some of the companies that offer two and three products a year. I also agree with the gentleman who said that we can no longer afford $50-$80 shirts and shorts or $200 shoes. I’m not ashamed to say I buy my golf shirts at yard sales and thrift stores for $1.00 to $3.00. They are brand name like Ashworth, Greg Norman, Adidas, etc. and I can get them looking like new. It’s time for the golf companies to rethink what they’re doing until the economy gets stronger.

      Reply

      flaglfr

      10 years ago

      Hate to say it, but this is a repost of my comments on the new Cally Driver. Seems apropos and maybe even prophetic for here too. TM and Cally have brought this issue upon themselves. I predict others will follow too. Looks like TM just had to take a pill….. A real bitter one.

      Good comments. The nice thing is that you will only have to wait a few months before a price break will come into effect that will reduce the cost by at least $100 and the announcement of another replacement soon thereafter. Am I sarcastic and unaccommodating with this? YES!!! I think we golfers have earned that right.

      It really breaks my heart (and yes to some extent my wallet) to see new releases happening over and over in a single year. It is like watching your dog get shot or hit by a car again and again. Why do we have to be patient? I don’t understand why they couldn’t let we the golfers know the strategy in advance and adopt it immediately. Why put out more junk that just clogs shelves and wastes both our time along with their reputation and (to an extent) money???

      Hogan threw away a line of clubs that wasn’t right for the market and worthy of representing his name. Cally (and yes the others too) should buck up and just adopt slower release schedules with well thought out quality products. If they want to spend advertising dollars, let them sponsor amateur golfing events or something like that rather than overloading an already saturated marketplace. Maybe this would help the game instead of clogging shelves with inane amounts of equipment. It might just bring some real change that will give us at least time to take a deep breath between release cycles.

      And yes, I understand the relationship between marketing and product release. Yes I understand the desire to build the proverbial better mousetrap. And yes I understand the difference between last years driver and this years driver is smaller and smaller each year. But how many of us are going to continue to go out and plunk down megabucks for something knowing that another version is just over the horizon within the next few months.

      Phasing is just too little too late. Buck up, slow down and take the medicine.

      Reply

      Orhan Etiz

      10 years ago

      With the reduction of people playing the game a company needs to adjust pricing models to support this downturn. In business being reactive vs proactive is the death spiral.

      Reply

      BrianS

      10 years ago

      They won’t be reducing prices. Nor should they, the cost of almost everything has gone up except consumer golf club prices in the last few years. Costs however have increased which means margins have shrunk for retailers.

      They need to raise prices and extend product life cycles to maintain the value of the product in the market.

      Reply

      TopPakRat

      10 years ago

      Crazy and making no sense. Just went to Dick’s web site to check their current inventory status on new TaylorMade products. Dicks currently has 13 NEW Taylormade drivers and 26 NEW TaylorMade Iron sets. No, I am not kidding 13 new drivers and 26 new iron sets. Most discounted with little or no margin left with the exception of their most recent intros. At this rate it Will take Dicks and anyone else in the same boat a good year to two years just to clear out what is currently stuck in the pipeline. The executive staff at T/M should be shot along with all the retailers who bought the story line..Why T/M ever bought Adams is another question I have.. The insights of T/M Management over the last 4 years at best was sub par and I am completely suprised that the former CEO of T/M is still even associated with the Adidas group. He along with his market scheming have to take a great deal of credit if not all for putting the golf rertail industry in the downward spirle it is in. I guess he did such a great job they had to promote him. Trust me the meter is ticking. I give him 6 months and he is gone.

      Reply

      BrianS

      10 years ago

      What isn’t being talked about here is that although they’d never publicly admit it TaylorMade has been pushing sales on eBay for the last 3-4 years.

      I have sat in the meetings with TaylorMade reps and regionals and had the open conversation about going to eBay with surpluses of product as a way to not get stuck in the way you’re discussing in this post.

      From what I heard this is coming to an end, which is going to make liquidating this stuff even more difficult.

      Reply

      golfercraig

      10 years ago

      Every good rep has a GREAT grey market customer. Not just TM, but Callaway also. They have a place to dump product. Adams is even worse. They have been picking up product for full credit for 2 years now, and selling it as closeout prices to eBayers. Once upon a time you could make some money in retail on closeout product, but when a guy is selling last years hybrid for $85, after paying $75 for it, because his entire overhead is just him and his brother shipping the stuff from their garage, it kills the retailer.

      O. Jones

      10 years ago

      Another topic not being addressed are the RockBottomGolf’s of the world. This is the dumping ground for all OEM’s and I don’t know why any golfer wouldn’t shop online. If you are purchasing a 9.5 stiff driver – why would it matter if you went to Dicks Sporting Goods, Golfsmith, Sports Authority, etc… when you can buy from RockBottomGolf at RockBottom pricing?

      http://www.rockbottomgolf.com/woods-drivers.html
      http://www.golfsmith.com/ps/search/drivers
      http://www.dickssportinggoods.com/family/index.jsp?ab=TopNav_Golf_MensGolfClubs_Drivers&categoryId=4414152&cp=4413989.4414118

      Who has leverage with consumers? That’s the bottom line.

      bill smith

      10 years ago

      TopPakRat. I totally agree.
      Here are perfect examples of how incompetent management at TMAG continues to survive.
      1. Purchase Maxfli. They ruin and mis-manage the business and to protect their jobs – they sell it to Dicks. Sorry adidas.
      2. Purchase Ashworth Golf. What do they do to protect management jobs. They let everyone at Ashworth go. Why? Because the adidas and tailor-made soft goods is tanking and they want to preserve TMAG jobs. Also, management did not do due diligence prior to the sale (Ashworth had millions of dollars in inventory that needed to be written off after the sale). Sorry adidas.
      3. Don’t forget the outsource relationship between TMAX GEAR and TMAG. It was a sweet heart deal for Jim Stutts and Mark Leposky given by Mark King. The company (TMAX) went bankrupt and TMAG had to bail them out. Can you say millions! Now Leposky is over at Callaway. You can watch how that unfolds.
      4. They purchase Adams Golf. TMAG is now suffering sales declines. What do they tell Herbert? Hey we have plan, don’t worry. We’ll shut Adams down. We can consolidate. Now once again they can protect their jobs in Carlsbad. They tell adidas: We have all this overhead in Carlsbad, we can now absorb that business (stop the bleeding) and at the same time they protect their own jobs.
      In the future, expect less TMAG product introductions supplemented with Adams launches.

      Reply

      Tony Covey

      10 years ago

      TMAX was a disaster. Little doubt about that.

      Not sure what happened at the time Ashworth was acquired, but now they’re basically managed by the same team now, so it’s not really possible to let just the Ashworth guys go. That particular brand is in the middle of a multi-year reinvention of sorts, and the type of obstacles they face are nothing the average guy would even consider. It’s not nearly as cut and dry as some apparently think.

      Regarding Maxfli. That brand had exactly 2 things of value. They had name recognition and a happy little niche with the Noodle brand. The 2nd part is Acquisitions 101. You don’t buy other companies for marketshare, you buy them for the intellectual property. In the case of Maxfli, TaylorMade bought it for the patent it owned for creating a cast urethane cover for a a golf ball. Everything else was worthless to TaylorMade. Selling the name and leftover parts to Dick’s was an exceptionally good business move.

      Adams…it’s horrible that people are losing their jobs, but you can’t argue that there’s not a lot of redundancy in that building. I’m sure the working goal is to maintain complimentary products from a centrally managed location. There will still be an Adams team and a TaylorMade team. Whether that’s sustainable long term…we’ll see.

      RON

      10 years ago

      I love every bid of this except the loss of jobs of coarse . But TM was nothing more than a fake money making machine golf company to me , and to think in this economy people go out and pay 70 to 90 dollars fr golf shirts look like the biggest idiots of all.

      Reply

      joro

      10 years ago

      Sad, I have been saying for years now that TM is ruining the Golf Industry with their flooding of the Market every few months with new stuff. The dam has finally burst, but too late. Mark King is an old friend and a marketing man, not buyer, but a seller and he has over sold, flooded the Market, coming out with new product 2 or 3 times a year worked for awhile, but it got old and worn out. That is not stability, it is simply mass marketing.

      I hope this blows over and the strong companies wake up and quit this race and just start making good product, not so often, and keep the cost afordable. It is the marketing and advertising that costs the money, slow down with the huge expensive marketing and bring things back to sanity. When a new club is 500 Bucks and the same club 6 months later is 200, something is very wrong.

      Reply

      RAT

      10 years ago

      It had t happen. TM,Callaway ,Nike Ping and others have kept raising the profit percentage mark to a point it is being corrected by the consumer. We won’t pay the extreme prices anymore. The fact the used equipment market (Pga Trade in guide) values your used goods as almost worthless, who can afford to keep trying to stay up with the Jones! The claims of more gains in yardage in a new club are appearing to not prove out. False advertising? I think these companies thought that we the consumer would continue to buy . I can still play my irons and etc. and have fun without trying to be the latest in equipment Joe and still have fun and win a few scats.. In every manufacturing business it’s supply and demand. I think the consumer is saying the prices are too high, drop them and we will come but only so many for so long.

      Reply

      mark

      10 years ago

      You do realize that top of the line drives have been 299-399 for 15 plus years right? its not like overnight drivers were 600 bucks. R7 came out at 499 about 9 years ago i think, and this year only one driver hit that mark with a 399 and 329 along with it from callaway. Reading all these posts about equipment being so expensive.. its laughable. 699 for a set of irons has been standard for 10 plus years. How much has milk gone up in 15 years? Its called inflation, and the golf equipment industry hasn’t really had any. titleist professional golf balls cost me 45 bucks 15 years go, prov1 are 47.99 get real!

      Reply

      Harv

      10 years ago

      TaylorMade might have mistakes in their home country, but far worse overseas. How can you expect an American run and operated company with no American oversight overseas. The USA is only one market, how many countries are there in the world that have golf courses? How many expats are living abroad with foreign national wives that could represent your company? I’m sure most expats (especially the retired) would work off commission only. If you leave it to the locals nationals, you get nothing but a cartel run operation from the person who owns the rights as distributor without any true intention to sharing product to other retailers in country. I carry thousands of clubs in our stores, the TaylorMade clubs, bags, gloves, hats I have to import from other retailers back home in the USA. Can you imagine that I must have my products shipped from 12 time zones away because we have a lame in-country distributor who never follows-up on a repeated invitation to supply us with his product. This is a common problem not only with TM, but all the other brands. Of course, we wish all businesses well, but you have to get the right people in place to make that happen.
      I truly hope all those who lost their job and families that relied on that income can bounce back elsewhere. It would be nice if your website can make a list where those who lost their job can list their resume and see if other golf course, retailers, manufactures, can help place those 15% who lost their job. Harv

      Reply

      Todd

      10 years ago

      It looks like the golf industry is about to follow in the foot steps of the Hobby industry.
      The perfect storm.
      Baby boomers become empty-nester’s sales sky rocket, at the same time innovations are made in R&D and production product gets to the shelves faster.
      Everybody wants to buy the best, they want to buy a better game.
      Now baby boomers are in their 60-80’s, their dollars are not going as far as they used too and most of them aren’t playing anymore because of their health.
      Sales are down market is flooded, manufacturers are make too much product because they need too, to keep the price per unit of manufacturing down. So they have to dump the left overs.
      So now, what do they do? make less units, cut out the middle men, sell direct to the consumer at a higher price and profit margin to try and make up for the loss in volume.
      Contrary to popular belief the mark up of clubs and balls at the retail level isn’t huge, like jewelry or clothing, but if the manufactures could keep 25% in their own pocket that’s what they will do.
      Sounds exactly like the Hobby industry. How many Hobby shops are left in your city?

      Reply

      Max

      10 years ago

      At least John Ward still has a job…and we can all be thankful for that. #thankstmag

      Reply

      Mo-Tn-ky

      10 years ago

      Don’t forget Steve Moreno, he’s made in the shade too.

      Reply

      D-man

      10 years ago

      Max? Yeah I’m with you there. And saved money not having to sell his home in Plano either…

      Reply

      Fozcycle

      10 years ago

      Thanks for the scoop Tony. You are always out there on the edge, looking out for the everyday golfer. I run a weekly game in Tampa with over 80 members, averaging 40 players every Saturday. If you did an analysis of the golf equipment in their bags, you would find that only a very few are bagging current golf equipment that was released in the last 12 months. Mostly they are playing 2 to 5 year old drivers with irons that are probably closer to 8 years old. These guys & gals play every week but they do not spend their money on the “latest & greatest”. I know that several of them play with mixed irons….Ping, Nike & Callaway, all in the same bag. Our best players have not changed their irons on over 6 years. You know, if it’s not broken, don’t fix it. Taylormade ruined the golf business because they never looked at the players and designed an equipment business that matched the needs of the golfers.

      Reply

      Regis

      10 years ago

      How many of those playing 2-5 year old drivers are playing Taylor Made? My guess-most.
      Tony is being lauded for this article and I love his stuff but really he took a financial report and took a picture of an ADAMS storefront stuck a “Sorry we’re closed” sign out front (I mean seriously Tony) and ran it up the flagpole to draw out every TMAG basher and frustrated retailer to vent.
      This follows up on his report on Dick Sporting Goods where he pretty much implicated TMAG for Dick’s demise-drew a huge response.
      The retail end of golf is no different than any other business. It changes. Barnes & Noble and small booksellers bash Amazon but consumers love their Kindles and e-readers.

      Most “Brick and Mortar” or “Green Grass” sellers that post really don’t provide custom fitting. How many can provide outside fitting sessions and carry a variety of shaft names (Oban, Accra, Matrix) {You can’t-I know}; then test those custom built clubs after assembly for compliance and provide follow up adjustment to the customer.

      It’s just easier to blame it all on Taylor Made. I know because I was playing yesterday with 2 guys with all brand new adjustable TM equipment and I just giggled as they continued to adjust their drivers as I consistently blew by them with my 290 yard frozen ropes using a 10 year old Titleist 907 driver with a stock shaft because Titleist is the only company that takes pride in their product and everything else is crap…………..

      Reply

      Tony Covey

      10 years ago

      I’ll pass your complaint about the image to the graphics department.

      CF

      10 years ago

      This is the stupidest comment on this thread. Congratulations.

      Hilarious when people not in the industry give their opinion. Ping cares as much if not more about their equipment than Titleist.

      What does an outdoor fitting matter? Are you one of those people who thinks your eye is better than the same technology used to intercept surface to surface missiles in the military?

      You also seem to fundamentally misunderstand the very specific and special relationship that Dicks/Galaxy has with TaylorMade.

      You really have no clue at all what you’re talking about.

      Regis

      10 years ago

      Obviously my tongue on cheek attempt was lost on you. No hard feelings-I was just funning. What constitutes “in the industry”. I’m 63 and been playing for 50 years. I started with MacGregor MT Tourney irons and persimmon woods. I have played every major brand over that span and I have been fitted for both my driver and irons multiple times almost every time by qualified fitters. I have done my own club work for probably 20 years and yes I think getting fitted outside makes a lot of difference. I don’t like being called “Stupid” and I assure you I am not. If you really believe that hitting into a net on a launch monitor is every bit as good as hitting outside on a launch monitor then I don’t know what else to say. I like all brands but Ping has tolerances in terms of driver loft just like anyone else unless you want to pay an upcharge for a tighter tolerance.
      Again my only point is that I am tired of posters blaming every ill in the industry on Taylor Made. I understand that retailers have problems with them but if they are true to their convictions then don’t carry their products. Limit your inventory to ,say, Titleist and Ping. A lot of pro shops do. Problem is if you had done that , historically, you would have missed the boat on Metal Woods, graphite shafts, adjustable hosels and hybrids (or rescue clubs as they were initially called). As to the technology used to intercept surface to surface missiles or for that matter surface to air missiles. I am more than willing to defer to your expertise. Congratulations.

      Karsten

      10 years ago

      You tell them. Nobody better bash ping. There stuff is phenomenal and there accessibility to HQ and customer service is top notch.

      Fozcycle

      10 years ago

      From my observation, at least 75% of them play Taylormade.

      mikey t

      10 years ago

      I’ve been working in the golf retail business for the past 9 years and you could see the writing on the wall ! Customers would constantly comment about TM putting out new product every 4-6 months and that instead of buying a product when it came out, they would just wait for the next new thing and buy the OLDER one at a discount ! And all TM reps cared about was slamming more product down our throats ! The bottom line was making more profit ! Hell, we’d see the TM rep 4-5 times a year to see new lines coming out !

      Reply

      Busterfudd

      10 years ago

      Hell, I was a hardlines (clubs, bags) manager at a GG store within the last 2 years. Worked there a year and a half. NEVER even met the TM rep once in that timeframe. You actually met a TM rep – truly impressive.

      Reply

      CF

      10 years ago

      Pretty sure the normal TaylorMade reps don’t service Golf Galaxy and Dicks.

      jim

      10 years ago

      I’ve heard this same comment from several retail and golf shops over the past few years too. TM has been digging their own grave in my opinion. Introducing new products every 4 to 6 months is ridiculous and as many have said in these comments, why buy new when you can wait for a few months and get it for half price. Ping’s/ Titleist’s model of introducing product on 2 year cycles seems much smarter. TM needs to get rid over the overstock and scale back their new product issues and then learn to treat their retailers better.

      Reply

      golfer4life

      10 years ago

      Hard to believe no one at TMAG had the vision to see this coming. I speak to countless one time TMAG faithfuls that feel they have been done wrong by a company they spent years supporting. You can only get away with playing customers for so long before it bites you. The look on peoples face when they ask, ‘how much their six month trade in is worth’?, is disappointment. And its almost always the same statement, “I just bought this six months ago”
      Hope this is a wake up call for all in the golf industry. The golf boom is long been over, stop trying to hack people, its not working!
      Great coverage on a very important topic. Well done!

      Reply

      Vic

      10 years ago

      It seems to me that blaming TMAG is missing the bigger issue. The equipment pipeline is flooded because millions of people have left the game. I called Wed. for a Sunday morning tee time at a popular course. I told them I’d like something between 10:30 and 11:00. They gave me the choices of 10:30, 10:38, 10:46 or 10:54. This would have been inconceivable in the not-too-distant past. I really hope more courses don’t follow the equipment companies off the cliff of declining participation.

      Reply

      Tony

      10 years ago

      A local course here called the Golf Club at Bridgewater was recently featured on HBO’s Real Sports about the decline of golf. I played that course twice, and it was really nice and a great layout along I4 here in Lakeland, FL. Course opened as part of a housing development in 2007 (which placed the course next to the housing development and not around it. Great green fees, and plenty of tee times. That course closed in 2011 filing for bankruptcy. A victim of the housing down turn. I expect more of that to happen in the area.

      Reply

      CF

      10 years ago

      No, that’s not why the pipeline is flooded, people aren’t leaving the game so fast that it’s outpacing sales forecasting.

      Unless you’ve sat in a buying meeting with a TaylorMade rep you can’t understand why they are putting so much product in to the marketplace.

      Reply

      Lou

      10 years ago

      I guess we all saw this coming, the question is….who’s next? Will the Callaways and Nike’s and for that matter, all other companies follow suit? I agree 100% that TMag flooded the market and they of course are being used as the scapegoats here but c’mon, aren’t they ALL responsible at one point?

      I LOVE GOLF!!! I’ve been playing seriously since my Dad passed away in 2007. I too, like anybody else, would like to buy the latest and greatest, but after I’ve paid for golf memberships and rental cart fees, I simply can’t afford to pay $400 for drivers or $1100 for irons. EBAY saves my life. They wonder why less people play, I don’t think it’s much of a lack of interest like it is not being able to afford to play. Our local club lost 100 members this year and I find it quite a coincidence that our local economy has lost over 100 jobs in the past year.

      That article that was written about how golf equipment should be going up. Well, it if it to come true, will further keep people like me from being able to buy from a local golf shop or a golftown etc…

      Golf needs more players – not more equipment!!!

      Reply

      Ryan

      10 years ago

      This proves once again how much of a cancer Taylormade has been to the golf industry for last two years or so. Very sad to hear this happened to Adams in TX but I fear this isn’t the last story we will hear like this.

      Reply

      Andrew Zacks

      10 years ago

      How do they promote the CEO with these numbers?

      Reply

      O. Jones

      10 years ago

      Great question Andrew!

      Reply

      Bill

      10 years ago

      Is this the beginning of the end of the big box golf stores? Yes, TM did this to themselves. Feel bad for the Adams brand. We’ve had Golfsmith, Golf Galaxy, PGA Superstores, Edwin Watts and a host of online companies like TGW selling equipment with a widget mentality.
      The economic model of the golf industry has imploded along with the economy taking a toll on golfers themselves. There will be niches that will survive but the product cycles must change and companies that became slaves to shareholders will either reinvent themselves or cease to exist. There are lots of good companies like Adams that are going to be drowned out in the sea of big name product.
      I stopped buying TM stuff years ago because (in MY perception) they became more of a marketing company than a golf company. The product may still be very good but their approach was about moving product, not so much about the golfers.
      NIke and Callaway are in the same boat. Trying to please corporate offices rather than golfers is the unintended perception. Golfers in general are not looking for golfs version of Air Jordans. It’s a different game. The game itself is one of people trying to fit the right equipment to improve their game. But most realize that for 99% of us, instruction and practice are far more beneficial than the latest toy. We like the latest toy also, but there’s little need to upgrade yearly especially in a down economy.
      I’m amazed at the soft goods end of the business also. So much product at what I consider ridiculous prices. $60 and $70 dollar shirts proliferate when the actual market is for the $15-$20 shirts. Shoes that used to be (recent history) $30-$50 are now 90-$150.
      I’ll pay more for nice goods but not at 100-200% more than what I can find for adequate goods elsewhere. I look at golf belts and shake my head. For a little logo, guys are expected to drop $50-$60 when a good quality belt runs half that if you forgo the logo. It’s nuts.
      Once again, these conglomerates have set themselves up for failure. In pursuit of high margins they’ve deluded themselves into thinking that the top 10% of vanity players and pros are the target market for mass appeal. It’s not just clubs, it’s the whole industry that’s become overpriced and the market has rejected it. It’s going to get ugly for the big guys but sadly, many innovative smaller companies are going to dry up along the way.

      Reply

      gdc64

      10 years ago

      Good post and pretty much right on.
      Golf equipment and the soft goods take a back seat to “real life” expenses. Higher food prices, medical prices, housing costs the whole gambit. All added together leaves less and less to spend on golf each year.
      TM and the other “big boys” have pretty much brought it on themselves with their rush at “new releases” every quarter and the massive advertising that goes with each new release. (A $600 driver, $1000 iron set is ridiculous.) Unfortunately some smaller, innovative companies with quality products may go down as a result.
      I would love to play more golf, but the increasing expense of doing so will make that unlikely.

      Reply

      Tony

      10 years ago

      You can often buy name brand (Nike, adidas, Ashworth, Cally etc…) golf clothes to include belts at Ross, TJMax and Marshalls (no shoes though) at deep discounted prices. I just bought a 2013 Nike TW shirt that normally went for $90 for $24. Nike golf belts can be had for $9-$12, and I’m talking the big buckle 2013-14 lines. You just have to go out and look. I will say in the last six months I have bought six to ten Nike golf shirts at my local Ross for under $24 a piece and all of them 2012-14 lines. I never pay retail for my golf clothes or shoes.

      Reply

      Mark

      10 years ago

      I understand people looking to save a buck, but if you want really good golf stores, not big box, you need to go and plunk down some money from time to time. A 100 dollar TW shirt costs the retailer 50 dollars. Those are the things that allow us to make a profit. A dozen pro v1 balls at 47.95 cost us 37 dollars. So we need people to pay full price for some clothing. The reason you see mom and pop shops dying out is because people have no clue what something costs. 399 driver cost about 250.. by the time its 199 like jet speed we make about 25 bucks a driver.. Try keeping a brick and mortar store open on those kind of margins. The public wants it all, latest greatest technology but don’t want to pay for it. They want big selection but want to get it at half off.. You can’t have it both ways. Support your local golf shops. If you think people are making millions selling balls and drivers, think again. Lets not forget when I started in the business the best selling clubs were teh great big bertha drivers and fairways.. 399.95 each, so golf equipment until the last couple of years has not worked any inflation into the price of clubs on the retail end, just the wholesale end. If a driver was 399.95 15 years ago you would think it would be 599.95 by now. You don’t get 99 cent big macs and 2.99 value meals at mcdonalds like you did 15 years ago.

      drjacko

      10 years ago

      This is soul destroying for the folks at Adams but it was always going to happen. It’s easy to continued wishfully thinking of Taylormade and Adams as separate entities but it makes no financial and logistical sense when you consider them under the Adidas umbrella. The argument the author is putting forward about/against current release cycles and product lines for Taylormade gets more emphasis if you say ‘Taylormade/Adams’ and suddenly you’re dealing R1/Jetspeed/SLDr/XTD/Tightlies.

      I just for feel sad that Adams’ guys seem to be the targeted bunch.

      Reply

      O. Jones

      10 years ago

      Perhaps some of the folks at Adams will be recruited by their ex-CEO now at Calloway.

      Reply

      Bill Smith

      10 years ago

      Comments:
      “A company spokesperson declined to comment on specifics, but confidential sources are telling us that the cuts include a high-ranking member of TaylorMade’s golf ball R&D Team”.
      Reality: This was not a high ranking member of TMAG golf ball R&D Team. It was a guy who had a sweet deal who never worked out of the Carlsbad office. Maybe this is a sign where golf balls are going with TMAG.
      15% of the the workforce! This is all non-management people. The people who are responsible for the millions of dollars wasted by purchasing and mis managing Ashworth, Maxfli, and now Adams Golf are still there. No serious shit has gone down. Don’t expect it to happen. You will see VP’s soon take Director roles before they let themselves go. TMAG spent the last three years going thru job title inflation. Bob Maggiore was let go because of the “puppet marketing plan” and lack of sales. Herbert has no clue. Print a story when real “management” heads roll.

      Reply

      David W

      10 years ago

      I really hope they don’t get rid of their golf ball division. If you haven’t played the Tour Preferred or the Project A you are missing out. I hit the TP farther than the Pro V1 and it spins just a well if not better and the same goes for the Project A vs the NXT Tour.

      Reply

      David W

      10 years ago

      And I’m not a TM guy, I don’t own a single TM golf club.

      Bob

      10 years ago

      TM balls have never moved the needle in any of our 432 stores. We have continued to carry them so that the brand has some presence on our shelves. In reality we could walk away from buying the TM branded balls and never miss a beat with relation to our overall golf ball sales and margins.

      Reply

      Bill Tetley

      10 years ago

      This is a conspiracy by the Free Masons to make lacrosse more popular.

      Reply

      Lewis

      10 years ago

      Works for me…my Son plays Lacrosse and maybe this will make it easier for him to get a scholarship and save me money to play more golf with…

      Reply

      Bill Tetley

      10 years ago

      This is all a conspiracy by the free masons to make lacrosse more popular.

      Reply

      POWG

      10 years ago

      It is all the fault of Bush and Chaney

      Reply

      markb

      10 years ago

      I view these moves as pro-active, necessary and perhaps evidence of some Realpolitik leadership at TMag.

      This shit is going down hard and fast and good management policy states that if you react quickly enough, cut the fat early enough, you might just make it. Adams probably should have been shuttered a while back. TMag got the slot tech they wanted and they milked it. In the flush times they tried to position Adams as a seniors and ladies label — but neither of those demographics change clubs frequently enough to show good sales.

      Now it’s time to face the music. Besides, does TMag really need new product lines in 2015. As tech platforms (and not merely fresh badges to jam into the Dicks/TSA pipeline) the SLDR and Speedblades have been well received and can enjoy longer life expectancies than the one-and-done precedents of recent years..

      The other shoe is still about to drop. I believe it will be two shoes, actually. Several “littles” will simply cease to exist because no one will see enough value in their brands to want to buy them. This could happen any day. Then we’ll see a quietly negotiated sale/merger of a big manufacturer in order to avoid bankruptcy. I think that big will be Callaway.

      Reply

      markb

      10 years ago

      And BTW, this looks like a scoop for Tony. Congrats. I see no mention of this news yet on any other major golf blog or golf news website.

      Reply

      Tony Covey

      10 years ago

      Thanks Mark…yeah, it looks like we had the story to ourselves for the better part of 12 hours (pretty incredible). Pretty big for us, although I take no joy in the news itself. I’ve been working on this for the better part of a week knowing that *something* big was going to happen. When credible sources confirmed, we were already 95% ready to go. It’s why we have a full story instead of just a couple of paragraphs.

      markb

      10 years ago

      Being the golf industry’s Cassandra is your “reward” for not drinking the mannies’ kool-aid, I suppose.

      What will be really interesting is to see how the other blogs try to spin this pending avalanche of bad news coming down the line in order protest their patrons.

      markb

      10 years ago

      “protect”, not “protest”.

      James

      10 years ago

      TM bought the latest teck from Adams and copied the slider technology from the Mizuno MP600 driver sold 5/6 yrs back. SO IS Callaway. So I still have my MP600 and took it to the course last week, played with 2 youngsters with TM in the bag, Sliders, they were devastated to find out my Mizuno “slider” was 6 yrs old..Yes TM is killing retail and they have run out of technology ideas, even white paint is now regarded as dated technology,

      Reply

      CF

      10 years ago

      It’s not that they’re out of technology, I’ve seen and heard of a few different technologies, a blue tooth driver for example, that are in the pipeline but at this point are far too expensive for what the market will bear.

      As far as your traditional golf club design technology, yes, they’re pretty much out of ideas on that front.

      Tony

      10 years ago

      Didn’t TMAG infringe on Adams slot technology and their punishment was to buy Adams outright?

      Reply

      SSY

      10 years ago

      Not only Slot technology, but mainly Aero Dynamic patent. TMAG could be sued by Adams for years of products if they didn’t buy Adams. Buying Adams company was way cheaper because they knew they can not win.,

      CF

      10 years ago

      Not true at all, man it’s hilarious what people who aren’t in the industry come up with on this site.

      Mark

      10 years ago

      Just to put this into perspective from a retailer… For the last two years, we have been forced to purchase clubs at full wholesale, less our discount, and sell the product at a discounted rate, and then wait till the next quarter to get a financial credit that usually ended up being around the time a new product was being introduced. We have spent countless hours chasing after financial credits as we watch our margins crumble. A 99 dollar RBZ was purchased for 84 dollars.. Currently a 199 jetspeed is purchased for 198 with the hope that a 24 dollar credit will come our way, often in the form of free product. I am happy they are making this change. They have single handedly ruined the golf market for retailers. We were on a path that led to nothing but Dicks and Golf Galaxy and TGW.com with shops like mine, that stress custom fitting going bye bye because we can’t compete.

      Some would say, just don’t carry the junk, but as a retailer we don’t want someone to go anywhere else for golf stuff. We don’t make money selling golf clubs, that just keeps the doors open, its accessories and bags and shoes and clothes that make us profitable, and if people go to golf galaxy for a 99 dollar driver we don’t have, they pick up tees and shoes and clothes. So here is to hoping the industry gets back to the way it used to be. Green grass and specialty stores that care about what we sell and want our golfers to be lifelong customers.

      Reply

      golfercraig

      10 years ago

      TM took back every Jetspeed at full credit, or issued IMMEDIATE refunds if you kept them. Your rep screwed you if you weren’t given this option.

      Reply

      CF

      10 years ago

      Is this TaylorMade PR? lol that is 100% not true.

      mark

      10 years ago

      Exactly, no they did not issue immediate refunds.. Call them today and see how they charge 198.10 for a jetspeed driver. Golfercraig you have no idea what you speak of.

      Steve P

      10 years ago

      Best wishes to those let go from Adams Golf. They worked hard to recreate the solid brand that Adams became before the TMAG acquisition. I knew from the moment I received the phone call on March 19th, 2012 regarding TMAGs eventual purchase that TM would completely screw up the Adams brand, and indeed they have.

      Reply

      golfercraig

      10 years ago

      For all the whining about Adams, what you need to remember is that there was nothing to screw up. The brand was dead, and is still dead. While they unquestionably make great equipment, they have no niche. They sold product because it was cheaper than other “premium” brands. A brand for old men and hackers and women tried, and failed, to become a brand for players. (Ask Cobra how easy that is. Puma is trying to sell Cobra for pennies on the dollar of what they paid for them.) As soon as the other OEM’s flooded the market with closeouts, their advantage was lost. They also paid out the largest SPIF in the industry from a legit brand, which was drastically lowered. Of course salespeople and chains were going to push Adams when they paid up to $50 cash every time you sold a set of irons. Adams, Nicklaus, Nickent, Powerbilt, MacGregor–all the same. Be a little cheaper, pay like crazy to the salespeople, PROFIT!! Then, not so much. Everyone else had product that was just as cheap. Your advantage is gone. Bye Felicia.

      Callaway is praying to the altar of Kevin Plank every day. The next big story is going to be worse than this one.

      Reply

      Tony

      10 years ago

      I have been playing Adams clubs across the board (minus putters and wedges) for quite sometime. I agree with your comment that TMAG would screw Adams up. Wish Under Armour had bought Adams. I think you will see Adams inventory of current player clubs be liquidated, then the rest of the inventory and name be sold to Dick’s like Top Flight was.

      Reply

      RB

      10 years ago

      All you have to do is wait 6 months and get the clubs for half price when another newer model guaranteed to give another 7 yards comes out. They did it to themselves.

      Reply

      Ryan

      10 years ago

      I think we’re on the verge of seeing this across the entire industry. $400 drivers, $900 irons and $250 putters are out of question for this economy. Prices in the industry need to come down significantly if we ever want to see the industry grow.

      Reply

      TwoSolitudes

      10 years ago

      Or..product cycles need to be extended. A 400 dollar driver that is expected to last and be competitive for at least 4 seasons is just fine. A 400 dollar driver that is considered ‘outdated’ by its own manufacturer in less than 4 months is not. At this point even 50 dollars is too much money for a driver from TM.

      The idea of quality needs to come back in to golf. Equipment can be valuable if it is meant to last you a long long time.

      Reply

      James

      10 years ago

      TwoSolitudes, You comments are so to the point. I fully agree, Corporate world has lost its ability to build long term sustainable business. Quarterly measures drive quarterly behaviour. we see this in the electronics sector as well. I played golf in the era of woods and blades. I bought a set of irons every 6 yrs. Same with drivers. Today I still play of single digit handicap with 4 yr old irons driver from Adams. The game and economy cannot afford redundant equipment every 6 months. Shareholder expectations and the market is not only killing to companies but also the industry.

      RevKev

      10 years ago

      Lots of great comments and responses to this blog but these are the best. The folks with the type of income that allows us to purchase $400 drivers and $1,000 irons are the very ones who remember well the day when you purchased clubs that lasted 5 plus years.

      I can buy two year cycles but 6 months is ridiculous, you don’t need to buy new becasue you know that the new stuff will be discounted or someone will impulsively buy new, use it a few times and then trade it back in because it doesn’t work.

      It’s not a sustainable model.

      My other reaction to this blog is the human cost. 500 at Dicks was sad enough, all of Adams? Wow! The cost of jobs, the families that are being impacted, that’s what’s starting to hit home for me.

      David W

      10 years ago

      My other reaction to this blog is the human cost. 500 at Dicks was sad enough, all of Adams? Wow! The cost of jobs, the families that are being impacted, that’s what’s starting to hit home for me.

      So True! And the bad part is that the guys who made the decisions to push new products out 2 or 3 times a year and was a major cause of this probably get to keep their jobs while the people who did the real work suffer.

      Tony

      10 years ago

      Great point and you were even discounting the actual prices of the equipment you noted. I am glad to see that the big companies are taking a beating as they have been giving us, the consumer, one for quite some time with their over the top prices that only the rich can afford. Impossible to grow golf when everyone is priced out of the game.

      Reply

      CF

      10 years ago

      Prices won’t drop, as golf specialty retail business owner I can tell you that many companies have discussed increasing prices and extending life cycles.

      Prices on clubs have held steady now for a number of years, while margins have shrunk.

      Prices won’t go down. They just need to become a more stable longer term investment for people.

      Reply

      Bob D

      10 years ago

      Did I read this correct
      Adidas 2014 outlook decreased from 48.5% to 49% from 49.5 to 49.8 Previous guidance 1)

      They are dictating our profit margin at 30% on golf hard goods.
      If they do a $100 off promotion we only see $70.00 in rebate.

      I hope the shareholders have a lot less lumps in their mattresses

      golfercraig

      10 years ago

      Stay on top of it Tony.

      Things are only going to get worse. This is the first shoe to drop. More to follow, and not just at TM.

      Reply

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