Sports giant Nike announced its retirement from the golf equipment business for lack of revenue. According to statements made by the brand, Nike will stick to golf shoes and apparel.
Nike announced the decline of their golf equipment sales on Wednesday, according to recent reports the brand has seen a drop of 8% to $706 million in that division alone. From golf clubs to bags, balls, and equipment, the brand will stop manufacturing all related products. Although it is uncertain when the brand will leave the golf-equipment market, the primary focus will be on producing high-quality golfing shoes and clothes.
Nike saw a huge increment in sales when Tiger Woods became the brand’s major image in the beginnings of the 2000’s. In the last eight golf championships, the brand hasn’t had a sponsored winner. Nonetheless, the giant sports brand could be planning its comeback with another rising star in the game.
The Tiger effect
Tiger Woods hasn’t played in over a year, due to back surgeries. Meanwhile, Nike is sponsoring big names in the golfing industry. Such as golfer Rory McIlroy, Charl Schwartzel, Paul Casey, Michelle Wie, Suzann Pettersen and Cheyenne Woods.
McIlroy brought a substantial revenue for the brand when he won the 2014 PGA Championship, becoming a great name for Nike and living up to the previous primary sponsor, Tiger Woods. Back then Woods was on a winner’s streak, leading him to be known as the brand’s biggest name. Other players, such as Michelle Wie have brought the brand considerable attention thanks to their abilities to the gold field. Nonetheless, it was Tiger Woods who started it all and had Nike the largest revenue in the golf market.
In 2009, Tiger Woods was one of the biggest game names in the industry and also had a spicy personal life being evaluated in the public eye. Tiger’s personal scandals with his ex-wife draw negative attention for the pro golfer.
Woods has been classified as the main reason of why Nike’s golf equipment industry spiked up and gain so much. CBS News reports the brand made around $91 million on revenue and $60 million in profit, while sponsoring woods and brought 4.5 million new customers.
The entire Nike golf campaign had been focused on Woods and his talent on the court, but after the golfer’s scandal had blown up and caused him to stay away from the public eye, the brand began to lose revenue. Some might call it the “Tiger effect,” while others declare Nike has never been that active in the golf equipment area, and that’s why is sticking to just manufacturing shoes and clothes from now on.
“We’ll continue to ignite excitement with our athletes and deliver the best of Nike for the game,” said Daric Ashford, Nike’s president.
The managers and Nike have assured the contracts between the brand and the golfers will not change, despite the recent news.
Source: CBS Local