Nike Golf: Why it collapsed

2016 08 Getty Images 532634668

EDITOR'S BLOG


Spectators at this week’s Paul Lawrie Match Play at Archerfield Links will get a minor look at how seriously Nike Golf valued its position in the golf industry.


The East Lothian venue, home to two beautiful golf courses, actually houses the European HQ of Nike’s custom fit operation. The facility opened two years ago and contains the highest technological advancements in fitting, with Rory McIlroy saying it took custom fitting to “another level”.

That facility will soon no longer operate under the Nike banner following the announcement the brand is “transitioning out” of golf hardware.
"The one downfall for Nike Golf is that it never had a driver that resonated with consumers."

Nike Golf saw revenues plummet by roughly $90m in 2016 as compared with 2014, and it seems this drop has led to what must be viewed as a surprise decision, considering the circumstances.

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Earlier this year, the brand signed 14 young tour players to its staff roster, a sign of its intent to enhance its presence on tour. Those signings included Brooks Koepka and Tony Finau, two of the biggest rising stars in American golf. They joined existing ‘Swoosh’ staffers Rory McIlroy, the world No.4, and 14-time major winner Tiger Woods, the latter being the company’s first high-profile client. Woods, who is recovering from injury, is the current world No.647.

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It seems, though, that major tour presence and the backing of the biggest sports brand in the world hasn’t been enough to generate sales.

The one downfall for Nike Golf is that it never had a driver that resonated with consumers. That’s what it boils down to. To generate sales, you need a driver. They never had a ‘Big Bertha’, or an ‘r7’. The Square driver, above, was more of a gimmick (although it did actually reduce dispersion in testing) and the Vapor line was used by tour pros. But too many product lines for one category is never a good idea. The company never quite got there with its driver, which stifled its sales and street cred amongst hardcore golfers.
"The Nike Golf division lost nearly $90m in two years."

In golf, it isn’t enough to shout about your product. You have to earn your crust and give golfers something to believe in before you’ll get them to open their wallets. Nike Golf spent millions on R&D, and hired some of the best people in the industry to run their various divisions. One of them, Angus Moir, from Scotland, moved from a successful stint at Wilson Staff and will now be out of a job. He, and many others like him, were absolutely dedicated to making Nike a serious player in the industry.

Read more -> Twitter reacts to news of Nike's downfall

Revenues for Nike as an organisation went up $2b last year to $32b. The Nike Golf division lost nearly $90m in two years. It’s almost as if it has decided it’s just not worth the hassle in the bigger picture. It is a classic case of a huge brand cutting its losses.



Consumers, it seems, just didn’t put Nike golf equipment on a high enough pedestal to make it a serious and sustainable competitor to Callaway, TaylorMade, Titleist and Ping. Golfers are a fickle bunch. Branding is important. It’s what gets golfers talking. The ‘Rory/Tiger’ promotional videos from a few years ago, above, were marketing genius. The Tiger Woods featurette, where he wins the Open as a little boy at St Andrews, was out of this world. But those Nike golf videos missed one thing: product. In hindsight, it gave them immediate brand exposure – but it has undoubtedly cost them in the long run.

Nike Golf's downfall: Your thoughts


What do you make of the news that Nike Golf is closing down its golf equipment division? Do you agree with Bryce Ritchie that its drivers were central to its downfall? Leave your thoughts in our 'Comments' section below.

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