Callaway to Spin Off Topgolf After a Rough Year of Declining Sales
Industry leader Callaway, once riding high on the surge in golf’s popularity, now finds itself in a bit of a sand trap. Their $2B acquisition of high-tech driving range Topgolf — initially seen as a way to cash in on the casual golf trend — hasn’t panned out as expected. With consumer spending slowing down, Topgolf’s once impressive growth has lost steam. But instead of reaching for the nine-iron, the sports equipment giant is pulling out a tool more commonly seen in B School — divestment.
- Since merging with Topgolf in Mar. 2021 to form Topgolf Callaway Brands, stock has dropped over 60%, with Topgolf’s sales down 11% year-over-year in July.
- Following a strategic review, the leading brand in golf gear plans to spin off its driving range from its core golf equipment and lifestyle business — not even four years after the merger.
A strategic swing: This decision has been brewing for a while — with murmurs that Callaway had been considering selling its equipment business as early as March. Company leadership believes both firms can thrive separately, though their futures will remain linked as they navigate what golf looks like in a post-pandemic, hybrid working world that initially boosted their fortunes. In any case, the proposed spinoff is expected to take place by the second half of 2025, at which point Topgolf will have its own stock ticker.
