Callaway Golf has taken full ownership of a joint venture in Japan that sells Callaway brand shirts, shoes and headgear � furthering the Carlsbad company's strategy of beefing up its apparel business.
Callaway paid $18 million to acquire the remaining 48% of its joint venture with TSI Groove & Sports. The deal includes 33 retail doors in Japan made up of stand-alone stores, outlet locations and store-in-store space.
"This acquisition is consistent with our strategy to accelerate growth in our soft-goods business across brands and geographies," said Callaway Chief Executive Chip Brewer in a statement.
Since he joined Callaway Golf in 2012, Brewer has orchestrated a turnaround in the company's core golf business, boosting club and ball market share.
But participation in golf is mostly stagnant. So Brewer has been slowly morphing the company toward apparel as a path for growth.
The moves began in 2016, when Callaway invested $10.6 million to form an apparel joint venture with TSI Groove & Sports. Callaway owned 52% of the venture.
A year later, Callaway acquired golf bag and backpack maker OGIO for $75.5 million and trendy golf shirt brand TravisMathew for $125 million.
Fueled by these acquisitions, Callaway's soft-goods sales surged to $330 million last year, up 142% since 2016.
The big leap came early this year, when Callaway bought German outdoor clothing brand Jack Wolfskin for $476 million.
Brewer plans to grow these brands partly by expanding distribution globally. Right now, OGIO, TravisMathew and Jack Wolfskin are sold regionally but not worldwide. TravisMathew, for example, is primarily a North American brand. Jack Wolfskin is concentrated in Central Europe and China but not elsewhere.
Taking full ownership of the Japan joint venture is a step toward expanding these brands into new regions.
"We have a great relationship with TSI Groove & Sports, but acquiring full ownership of this business provides our Asia team with a platform and the flexibility to support a fully integrated, multi-branded soft goods business in Asia," said Brewer.
