© Reuters. An Adidas emblem is seen on the new Futurecraft shoe unveiling occasion in New York Metropolis, New York, U.S. April 6, 2017. REUTERS/Joe Penney/File Photograph/File Photograph
By Helen Reid
HERZOGENAURACH, Germany (Reuters) – As sportswear rivals jockey for place forward of subsequent yr’s Paris Olympics, Adidas (OTC:) is aiming to stamp its model on smaller occasions akin to breaking, climbing, skateboarding and BMX.
After a high-profile fallout with Ye, the artist beforehand generally known as Kanye West, ended its extremely worthwhile Yeezy shoe line, Adidas CEO Bjorn Gulden is in search of to reboot its picture.
And the Olympics are a key enviornment for the worldwide sportswear giants that spend tens of millions sponsoring athletes, sports activities federations and nationwide groups, in addition to on occasion advertising and marketing.
A shift again to sports activities somewhat than celebrities is a key a part of a recreation plan by Gulden, who took over as Adidas CEO in the beginning of 2023, to show round its fortunes – a tactic which is able to face its largest worldwide check at Paris 2024.
“For whatever reason the old strategy here was to focus more deeply on fewer sports, and I’m the opposite, I want Adidas again to be in the smaller sports and to be visible,” he stated.
“Focusing only on the four or five biggest sports is, first of all too easy, and it’s stupid to be honest,” he added in an interview at Adidas’ headquarters in Herzogenaurach, Germany.
A profitable Olympics is a should if Adidas is to win again market share it has misplaced to rivals over the previous 4 years and reward buyers who’re pinning their hopes on Gulden.
Shares in Adidas, the second-largest sportswear group by world market share, are up greater than 50% to date this yr, outpacing Nike (NYSE:) and Puma, after two consecutive years of losses.
Whereas the principle focus for Adidas continues to be on the massive Olympic sports activities like athletics, engaged on extra area of interest disciplines stretches design groups and generates concepts for extra mainstream merchandise like trainers, Gulden stated.
Breaking, which has its origins in hip-hop, additionally has a streetwear and way of life attraction, Gulden stated, whereas providing a chance to succeed in new audiences in key markets akin to China, the place the most recent Olympic sport is standard.
Adidas in June signed China’s Liu Qingyi, generally known as “B-Girl 671”, the world primary feminine breaker, however competitors is sizzling.
Nike is official sponsor of the U.S., Japanese and Korean breaking federations and advised Reuters it has signed 20 athletes. Puma additionally just lately signed Chinese language athlete Qi Xiangyu.
PERFORMANCE
As a part of a drive to draw youthful individuals to the Video games, climbing, skateboarding and BMX freestyle, which made their Olympic debuts in Tokyo in 2021, may also characteristic in Paris.
Whereas it’s troublesome to say how a lot the Olympics drives sportswear gross sales, the Video games assist manufacturers construct a repute for the “performance” merchandise utilized by elite degree athletes.
Adidas signings this yr embody BMX athlete Kieran Reilly, the Brazilian Skateboarding Federation and the Polish Olympic Committee, though Gulden stated its presence in Paris is not going to be as huge as he would have appreciated, as Olympics sponsorship contracts run for a number of years.
“The Olympics are important for these brands in terms of showing their technology in every sport,” stated Boris Radondy, who invests in sports activities corporations at French asset supervisor DNCA.
“When these brands forget that they are a sports brand, the customer goes away. You can’t be only lifestyle,” he added.
Puma is focusing primarily on athletics, the place it has already invested considerably as official sponsor of the Jamaica Olympic Affiliation, having signed Usain Bolt when he was 16.
“We still need to focus on gaining market share in these areas,” Richard Teyssier, Puma’s world model and advertising and marketing director advised Reuters.
Puma this yr signed 35 new athletes throughout monitor and subject disciplines from javelin and lengthy bounce to 10,000 metres.
“For them it’s very important to be exposed in track & field, and in the past they have picked the best athletes,” stated Radondy, whose fund holds Puma shares.
At round thrice Puma’s measurement by way of gross sales, Adidas can afford to spend on extra athletes and extra sports activities on the Olympics. In flip, Nike can far outspend Adidas.
However Kerryn Foster, head of specialist sports activities at Adidas, stated “we continue to invest more and more in the Olympics as a company, not just in the event but in the lead-up.”
For the shareholders who’ve backed Gulden, the hope shall be that his new Adidas strategy can ship gold.
