World’s most popular sports brand, Adidas, has decided to shut down its all the golf clubs around the globe. The huge step was taken when the company hired an investment bankGuggenheim Partners to look out for various option in golf business segment amid the drop in sales up to 26% in 2015. The renowned company would definitely continue manufacturing footwear and clothing line. It includes brands like TaylorMade, Adams and Ashworth.
The respective sector of Adidas saw huge downfall in revenue which was nearly 13% and further 1% in the very next three months. On the other side, shares rose up to 2% giving it a noel positive sign despite of the company’s poor performance in golf club unit from the past few years.
According to Herbert Hainer, CEO, Adidas,TaylorMade is a very viable business. However, we decided that now is the time to focus even more on our core strength in the athletic footwear and apparel market. The planned divestiture will allow us to reduce complexity and focus our efforts on those areas of our business that offer the highest return. Though the conglomerate is confident in its growth opportunities.
An analyst from DZ Bank, further gave a statement that selling off its golf clubs was a good idea and took a profitable step in terms of futuristic approach. It was very much needed as the competition grew year by year and to breath in such tough market competition is not an easy task. The decision would help in compelling with its earning as well as marginalised growth rate.
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Another analyst belonging to Main First estimated the price of all the three firms which was worth of 470 million Euros or say 2.90 Euros per share. The company’s shares has surprisingly risen by 38% in its very first quarter of financial year.
As per profit and sales forecasts, Adidas segmented its complete details country wise such as 30% in China and 22% in North America. The company is trying to set his foot with its competitors like Nike and Under Armuor. Apart from these two countries, shares rose up to 25% in Europe share market in recent financial year.