TaylorMade lays off 16 Adams employees
Sunday, February 9, 2014
PEBBLE BEACH, Calif. – TaylorMade-Adidas Golf laid off 16 employees from its Adams Golf subsidiary Feb. 6.
According to Mark King, TaylorMade's chief executive officer, the staffing changes were made to Adams' Champions Tour staff and reflected a tough business environment. King cited a need to find synergies with the TaylorMade staff members, who now will service the Adams touring professionals.
“When we bought the company, we just wanted to leave the company alone as long as we could,” King said at the AT&T Pebble Beach National Pro-Am. “And now we're just looking for places where we might be able to find synergies.”
In March 2012, Adidas Group announced that it would buy Adams Golf for approximately $70 million, a premium of approximately 71 percent to the share price of the publicly held company based in Plano, Texas.
“Our mission is to be the best golf company in the world across all geographies, products and customer demographics," King was quoted then, "and adding Adams Golf is another important step in achieving that goal.”
Little more than three years earlier, in November 2008, King had overseen the acquisition of Ashworth, another public company that at the time was deeply troubled, as reflected in the purchase price of $1.90 per share.
“We bought Ashworth, and we took a strategy that's a normal acquisition strategy – when you've got a bunch of resources, you can get rid of a bunch of cost – and . . . it was a lot more broken than we thought," King said at the recent PGA Merchandise Show in Orlando, Fla. "And then we got rid of all of the people that made up the Ashworth brand, and we thought we could just do it through departments, and a lot of that has not worked."
Because of the Ashworth experience, King took a different approach with Adams, deciding to leave the entity intact and run it almost separately from TaylorMade. The decision to separate the 16 employees was the first public sign in the U.S. that TaylorMade was asserting itself over its subsidiary.
“I loved those guys,” Champions Tour player Kenny Perry said of the Adams staff via text message. “Those guys were very instrumental in helping me win the (Schwab) cup last year. They are very smart people. Bummer.”
King conceded that it was a tough decision to let employees go but that 2013 was a tough year for everybody on the golf equipment side and his goal was to get as lean as they could and they would look for synergies that would allow the company to be more efficient.
King added that no other layoff was imminent at Adams, Adidas or TaylorMade.
The job cuts at Adams were not the first substantive changes at the division. Last year Adams stopped using international distributors and instead brought most of the selling in-house, similar to TaylorMade's approach, and realized immediate results.
“We did $120 million in Adams and did $104 or $105 (million) the year before, so it's up about 15 percent,” King said of the Adams business. “This year we think it'll go up again about another 15 or 20 percent, and the following year we think it'll actually have better growth because we will really have traction outside the United States, and there's pretty good interest for it.”