The Loop
Nike Exiting Golf Club Business, to Focus on Footwear, Apparel
2015 Getty Images
Nike, the most valuable sports brand in the world, is stepping out of the golf equipment business.
A company press release indicated that Nike “will transition out of equipment—including clubs, balls and bags” to focus on footwear and apparel.
“We’re committed to being the undisputed leader in golf footwear and apparel,” said Trevor Edwards, president of Nike Brand in a company press release. Sources said layoffs were announced this afternoon. Several calls to Nike officials this afternoon were not returned, and the status of Nike's club design headquarters in Fort Worth, Texas, called The Oven, was unknown.
Nike, which reported flat to down annual sales in its overall golf business the last two years at just north of $700 million in annual sales (which includes shoes and apparel), has been in the golf business since 1984, but only introduced its first clubs after bringing in Tom Stites and his independent club design team at Impact Golf in 2000. Its first efforts came in 2001 with the Nike Forged Blades irons and then they were followed in 2002 with Pro Combo irons, which uniquely combined three different kinds of irons within the same set. Its sales in 2013 and 2014 were nearly $800 million.
Today's announcement comes just a few days after the company's 2016 line of clubs was extraordinarily reduced in price. That included $400 Vapor Fly drivers reduced to $150 and $250 Vapor Fly fairway woods to $100.
The company has struggled to become a leading player in the equipment business, with market shares in woods and irons that were routinely one-tenth those of leaders Callaway and TaylorMade.
The company was known for non-traditional equipment designs over the years, including the cavity back Slingshot irons, square drivers named Sumo that reached the USGA’s limit for moment of inertia and golf balls called Mojo that were marketed in a psychedelic box. The company had groundbreaking equipment technologies, including sole channels and cavities in its metalwoods, shorter-shafted but larger headed hybrids that were like mini-fairway woods and golf balls that utilized a lightweight, ultra-resilient polymer resin material in their cores called RZN while the majority of the industry’s golf balls feature cores made exclusively of polybutadiene rubber.
Said one current Nike staff player, "I really love their equipment, but I'll tell you this: In all the pro-ams I've played, I've never once seen one of my partners using a Nike club."
There is no indication what will happen to Nike’s present tour staff, which in addition to Tiger Woods includes world No. 4 Rory McIlroy and 14 new players signed this year. That roster includes big hitting burgeoning stars Brooks Koepka and Tony Finau.
Playing this week at the Travelers Championship, Finau was one of several Nike players who got the news late Wednesday afternoon.
“I just heard in the last hour so it’s still a little bit of a shock, to say the least,” said Finau, who signed with Nike in January. “I love the equipment I’m playing now, and it’s a real process to get through to make a change like that. I don’t know exactly what it’s going to mean for contracts, but it’s pretty likely that this time next year I won’t be playing Nike clubs.”
But Finau said he understands the way the industry works. “I totally understand it from their perspective,” he said. “They’re killing it in apparel. They’re killing it in footwear. It’s just business.”
In the meantime, Finau isn’t planning on making any equipment changes for the immediate future, and likely nothing until the start of the 2016-17 PGA Tour season or even later. He’s got the FedEx Cup race and he even still plans to make a late run at earning a spot on the U.S. Ryder Cup team, starting this week.
“I just have to put all this in my rearview mirror,” he said. “I can’t worry too much about it. Just go play. I’ll definitely be playing Nike this week.”
Still, the company’s announcement today indicated that it planned to expand its roster, reading in part that “it will accelerate innovation in its golf footwear and apparel business and will partner with more of the world’s best golfers.”
It’s just that in the future it seems none of them will be using Nike golf clubs and balls.