A (Video) Message from TaylorMade CEO, David Abeles

“By now, I sincerely hope that all of you have received your letter from me spelling out the recent news coverage on TaylorMade Golf, as well as some of the great results and momentum our brands have right now in the market.” – David Abeles, CEO – TMaG

By: Tony Covey

On May 10^th, TaylorMade provided a video to its Staff Ambassadors/Professionals. Generally, these guys are non-touring golf professionals who manage or otherwise work on-course or elsewhere in golf retail, and who have equipment deals with TaylorMade.

The video along with the supporting narrative can be found here.

While not intended for public consumption, the video provides some interesting insight, not only to the eventual sale of TaylorMade Golf, but also to how that situation is being interpreted for, and conveyed to, the staff ambassadors whose job it is to, among other things, actively promote and sell TaylorMade products.

I would encourage you to watch the entire video, but for those who aren’t interested in sitting through a 12-minute overview of the current state of TaylorMade – or on the chance that the video disappears from the internet - here are the bullet points:

Update on the Sale of TaylorMade Business

• There are things being worked that will allow TaylorMade to continue to be the best company in golf.
• adidas is in the process of negotiating with potential buyers for TaylorMade, Ashworth, and Adams
• “Nothing is definitive at this time, and quite candidly, nothing is going to change for the foreseeable future”
  • Note: It’s worth checking out a recent interview David Abeles did with Golfweek’s David Dusek. When Mr. Abeles speaks candidly the factuality of what follows is often open for interpretation.
• Nothing is changing with sales reps or customer service
• There are no changes to professional staff contracts with the company

 

The Business Itself

• TaylorMade products are red hot in the marketplace.
• Brand perception on the part of the consumer is on the upswing
• Market share and sales are growing
  • Note: The April Sales report from Golf Datatech is in. TaylorMade lost market share in both the metalwood and iron categories.
• The #1 player in the world, and 5 of the OWGR’s current top 20 play TaylorMade.
• The company has lots of momentum in the US, Europe, Asia, and the Tour
• TaylorMade is doing a better job support its staff pros and their business and is doing a better job of creating value

 

Adidas Golf

Note: There was no mention of the fact that adidas Golf will almost certainly not be affiliated with TaylorMade in any capacity by the end of the season.

• On the strength of Tour 360, adidas footwear is #2 both in the US and globally
• adidas Golf’s "bottoms" (shorts and pants) business has doubled due to the success of the Ultimate Short
• The company is optimistic about the Olympics where it is the Official Uniform supplier for the USA golf team

Note: None of this is particularly surprising given that, for the last couple of seasons, adidas has inarguably been the strength of the company’s golf business.

 

TaylorMade

• Company is showing incredible results through Q1
• M family is the #1 Metalwood through Q1
• Irons business has been great (M2 #1 for March)
• The company continues to build a world-class experiential platform for staff pros and their club members
• Revenues at fitting events have more than doubled
• Business grew by 6% in Q1, and the company more than doubled that with staff customers
  • Note: While 6% can rightfully be viewed as a small step in the right direction, gross margins are slightly down, and the company still lost money in Q1. Given that Q1 is generally the most profitable for golf equipment companies, it’s unlikely the company will turn a profit in 2016.

The rest of the video deals largely with events and other opportunities for staff professionals. You might find it interesting to see the type of events TaylorMade puts on for its ambassadors, but from a business and equipment standpoint, there’s nothing of particular note.

Your Thoughts?

We’re very interested to hear how this message is being received by TaylorMade ambassadors and other pro shop and retail staff, and what morale is actually like inside of TaylorMade-adidas golf right now. Feel free to leave a comment below, or contact me directly (email links are in my profile below). All information will be kept anonymous and confidential.