As Tiger Woods’s Probable Nike Exit Comes Close, Why Did $186.57B Giant Fail in Golf?

Tiger Woods’s partnership with Nike has been a crucial part of the brand’s legacy. However, recent reports suggest that the 15-time major champion and the sportswear giant would like to part ways after 27 years of collaboration. Although Nike’s journey with golf goes way back to 1986, when it started making golf shoes, it only started making noise in the golf world in 1998.

2 years after signing Woods, with its decision to enter the golf market with equipment, Nike got recognized as a major golf brand. Almost after 18 years of being in the equipment business, in 2016, Nike, unfortunately, called it quits and shifted its focus entirely towards the production of golf apparel and footwear. But why did the brand take such drastic measures?

Nike’s shift away from the golf equipment business

Nike shocked the golf industry on August 3, 2016, when it announced that it had stopped manufacturing golf equipment. This decision was the outcome of the declining sales and profitability of its golf equipment. The $186.57 billion giant had been struggling for years to compete with brands like Titleist and Taylormade.

In 2016, Nike’s golf business reported sales of just about $700 million, as the brand was facing challenges with flat-to-down annual sales. Despite being in the golf scene since 1984, Swoosh introduced its first golf clubs in 2001, starting with the Nike Forged Blades irons and later the Pro Combo irons in 2002. As a result, in 2013 and 2014, sales peaked at nearly $800 million.

Notably, in early 2016, Nike significantly reduced the prices of its 2016 line of clubs, with Vapor Fly drivers dropping from $400 to $150 and Vapor Fly fairway woods from $250 to $100. In the same year, the company shifted its focus to the footwear business, as golf equipment manufacturing never really turned profitable for it. According to Nike co-founder Phil Knight, “It’s a fairly simple equation: we lost money for 20 years on equipment and balls. We realized next year (2017) wasn’t going to be any different.”

It was in 2016 when all the Nike-sponsored golfers stopped using the brand’s equipment and had to look for other equipment sponsors. Though the brand is not in the golf equipment business anymore, it still has ties with the golf fraternity via its other productions.

Nike still stands strong in the golf market

After shutting down the ball and club manufacturing, Nike decided to focus on the production of its golf apparel and shoes to become the ‘undisputed leader’ of the industry. The shoes and apparel were more profitable for the brand and had more room for innovation and differentiation. Nike continues to sponsor some of the world’s top golfers, such as Tiger Woods, Rory McIlroy, and Brooks Koepka, who still wears its clothing and shoes on the course.

Also Read: Tiger Woods’s $500M Exit: Timeline of the Tiger-Nike Partnership Explored

By doing so, Nike maintained its brand presence and influence in the golf world while avoiding the risks and costs of the golf equipment sector. Nike also kept its sponsorship deals with some of the best golfers in the world, who helped to promote its brand image and reputation in the golf industry.

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