Adidas news and facts history

Adidas is a German sports-clothing company. It’s also known as ‘the brand with three stripes”. The company is named after its founder, Adolf (Adi) Dassler in 1920. Started producing sport footwear adidas (officially without capitals) now produces footwear, bags, shirts and other sport and clothing related items.

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Ashley sells Adidas stake

Sportswear billionaire Mike Ashley has sold his stake in Adidas, earning him a windfall in a short amount of time. The Financial Times estimates his profit at a minimum of €43 million over a mere eight week period. Ashley, who is the founder of Sports Direct International, caused a shake-up when he started building a stake in the German sportswear giant two months ago, particularly when his identity was not yet known. The industry speculated about his motivation, but Adidas was unconcerned.

On 14 May, Ashley let Adidas know he had sold his stake to below 3 percent, and it is now believed that he has sold his entire share in the company. It is estimated that if he acquired only 3.14 percent in Adidas, he would have made €43 million. Some believe his stake was actually bigger.

www.adidas.com
5 June 2007

Adidas net earnings down, sales up

Sportswear giant Adidas has reported a decline in net income of 11 percent to €128 million, on sales up 9 percent to €2.5 billion for the first quarter. The results were in line with expectations, as the firm reiterated its financial outlook for the year. Operating profit dropped 8 percent to €229 million, while pre-tax profit fell 13 percent to €191 million.

The company said both the Adidas and Reebok divisions drove sales. Adidas revenues rose 7 percent, while Reebok sales soared with 22 percent. Adidas did say that “as in the first quarter of 2007, three months of Reebok's revenues are consolidated versus only February and March in the prior year. On a like-for-like basis, comparing the full three-month periods and excluding the transfer of the NBA and the Liverpool licensed businesses to brand Adidas, currency-neutral Reebok sales declined by 5 percent.”

Nevertheless, sales grew strongly in nearly all regions, particularly Latin America (up 36 percent) and Asia (up 13 percent). European sales rose 10 percent, but North American sales remained flat. “ Our group has gotten off to a strong start in 2007," said chairman and chief executive Herbert Hainer in a statement. "The Reebok integration is beginning to pay off as we realize the first revenue and cost synergies. Adidas and TaylorMade-Adidas Golf impressed with strong product launches.”

www.adidas.com
9 May 2007

Apax eyes Adidas

Private equity group Apax Partners is believed to be keen to buy a large stake in sporting goods gaint Adidas. Such an acquisition could even lead to a full-scale bid for the company. The news follows in the wake of PPR's proposed acquisition of 27 percent of rival Puma, which may also result in a full-scale bid. Apax was said to be preparing a tender offer to shareholders of Adidas, at €50 a share, reports the FT. The private equity firm is looking to acquire 25 percent of the company, which is valued at over €9 billion.

Only recently, Adidas was the subject of takeover rumours when it became apparent that a mysterious suitor was building a stake in the company. When it emerged that billionaire entrepreneur Mike Ashley was acquiring stock under his own name, the unrest settled. Industry experts do not believe he will make a bid for the company, particularly because of its high market capitalisation. Nevertheless, interest in the company has not waned. Rival private equity groups are also said to be eyeing Adidas, although a succesful tender offer from Apax may limit competition. According to the FT, Adidas is attractive to potential bidders because it is still vulnerable after its purchase of Reebok two years ago as it tries to integrate the two businesses. Furthermore, the company employs relatively few people in Germany, leading experts to believe that a takeover attempt from Apax would not be objected to.

Although neither company would comment on the news, a source close to Apax said that the firm was looking to build a stake in the German sporting group. Apax has been on an acquisitive streak in the retail sector. Last year it acquired the Tommy Hilfiger fashion group for $1.6 billion.

www.adidas.com
18 April 2007

Ashley acquires stake in Adidas

Billionaire entrepreneur Mike Ashley has acquired a 3 percent stake in German sportswear group Adidas, valued at €270 million (£183 million). The notoriously private owner of retailer Sports Direct, which raised £929 million with its partial flotation last month, has acquired the Adidas stake in his own name, as opposed to the stakes in Blacks Leisure and rival JD Sports that are in Sports Direct's name.

Ashley has stated in the past that it is his goal to create the world's biggest sports retailer. To this end, he last year acquired a 29.3 percent in the flailing outdoor wear group Blacks Leisure and also holds a 10.3 percent stake in JD Sports. He financed his current acquisition with proceeds from Sports Direct's flotation. His acquisition of the Adidas stake initially caused alarm, until it was revealed that Ashley was behind it, and not a private equity consortium. Industry experts relaxed at the news, as Adidas is too expensive for Ashley or his company and his modus operandi has never included joining forces with other investors.

The FT has speculated that Ashley may have taken a stake in Adidas to defend his business in the UK market from initiatives taken by Adidas and US rival Nike to protect their brands from discount store policies - like that of Sports Direct - which tend to cheapen the brand. The paper reported, however, that a source familiar with Ashley said the motivation was financial; he might just have felt that Adidas is undervalued and chose to strategically invest his money. Meanwhile, Adidas is unconcerned. “One would have to ask Mike Ashley himself what his motivation was,” says Jan Runau, chief corporate communications officer for Adidas. “Looking at his background, his investments have been mainly short-term. Be that as it may, his intention to create the largest sports retailer does not infringe on our business.”

www.adidas.com
27 March 2007

Adidas Q4 profits disappoint, 2006 record sales

Despite a rise in Adidas' net profits of 26.1 percent in 2006, fourth quarter profits fell below analysts' expectations. The German sportswear giant said that net earnings for the quarter were up to €13 million, compared with a €4 million loss last year, but was still feeling the effects of its integration with Reebok. Sales for the quarter leaped 47.8 percent to €2.25 billion, although without Reebok, sales rose only 4.8 percent to €1.59 billion. Profit for the full year rose 26.1 percent – in all regions except Europe – to €483 million on sales up 52 percent to €10.08 billion. Group sales in Europe grew 32 percent.

“2006 was a truly exciting year for the Adidas Group, as we strengthened our brand portfolio by acquiring Reebok and exceeded the 10 billion euro sales mark for the first time in the group's history,” said Adidas chairman Herbert Hainer in a statement. “Our performance at the 2006 World Cup was a standout in leveraging our brand strength, and we clearly delivered strong operational and financial results.”

Sales at TaylorMade-Adidas Golf did particularly well, rising 20.8 percent to €856 million, while the Adidas brand itself saw sales climb 13.1 percent to €6.63 billion. Reebok's consolidation added €2.47 billion to group sales. By region, the US outperformed other regions with a 107.2 percent rise in sales, followed by 56.4 percent in Latin America, 32.6 percent in Asia and 31.4 percent in Europe.

The group's main goal, looking forward, is to improve falling sales at the Reebok brand. It will also be working on its weak order backlog, which were adversely affected by transfer of licensed NBA and Liverpool businesses from Reebok to Adidas. The group is investing in marketing to lift brand communication. New products will be launched, particularly in running, branded apparel and women's apparel. It has also launched a new sportswear and footwear line designed by actress Scarlett Johansson. Hainer said that building Reebok in Europe and Asia was a priority, as the US market was already saturated. He said that the group as a whole expected “increasing momentum throughout the year.”

www.adidas.com
8 March 2007

Adidas to invest in Reebok

Adidas, the German-owned sporting giant has cut its forecast for profit growth in 2007 as a result of plans to invest in its ailing Reebok brand. Adidas is the world's second most successful sports group after Nike. The group cut its forecast for net income growth from 20% to 15% for 2007. Incidentally, the news sent its shares down 8%, the biggest drop on Germany's Dax index, according to the BBC. Adidas bought Reebok in 2005 to boost its trade in the US, but recent figures show Reebok sales have fallen.

"Reebok's orders are disappointing and the outlook is lacklustre. It will take longer to put Reebok on track," said Nils Lesser, an analyst with Merck Finck. Reebok recently signed a licensing deal with Hollywood Scarlett Johansson to design a line for the ailing sports group. Adidas reported sales for the three months to the end of September were 53% higher at 2.9bn euros (£1.9bn; $3.7bn), the same period saw Reebok sales down by 7%. Net income for the quarter was 244m euros.

Adidas said it planned to invest an extra 50m euros in Reebok during 2007 to improve the product range. However, the company said the Reebok business was still making money. "Reebok is profitable. We will be profitable in 2006 and obviously also in 2007," said chief financial officer Robin Stalker.

www.adidas.com
www.reebok.com
9 November 2006

Adidas opens its biggest athletic store

This week Adidas opened the world's biggest Adidas Sports Performance store on the Avenue des Champs-Elysées in Paris . In attendance were some of the world's greatest athletes, including soccer player Zinedine Zidane and tennis star Justine Henin-Hardenne. “The Champs-Elysées has a very special meaning for us,” said Roland Auschel, senior vice president of Europe, the Middle East and Africa . “Not only is it the most famous shopping street in the world, (but) we celebrated the World Cup here in 1998.” The company expects a footfall of 150,000 visitors before the end of the year, of which 70 percent tourists.

Adidas France is outperforming the company's home market in Germany and claims to control 14 percent of the French sportswear market. Nike says it controls 11.8 percent of that market. “Adidas is the leading sports apparel business on the French market,” André Maestrini, president of Adidas France , told WWD. He said women's sportswear and soccer were the main drivers of the French business. “The women's category is essential, we wanted to create a feminine atmosphere and intimate space where shoppers can feel relaxed,” he said, commenting on the second floor of the store which is devoted to women's wear. An 860 square foot area is devoted to Stella McCartney for Adidas.

www.adidas.com
27 October 2006

Adidas adds yoga and gym

Adidas by Stella McCartney is adding yoga and gym studio wear to its offering for spring 2007. The line, a collaboration between the sportswear giant and designer McCartney, has been adding categories to its assortment since its launch in February 2005. “I chose to add a yoga line because it is hot and people should look hot when doing it,” McCartney told WWD. “It is all about expressing yourself in movement and in the way you look – having a choice, for once, instead of settling for second-best in the way you present yourself and not compromising that just because it is technical sportswear. The colour palette is still delicate with a kick, and sexy silhouettes, leotards, late Seventies meets next year.” McCartney was inspired by dance, which also employs lightweight fabrics designed for layering. The lace detailing in the line was a reflection of her English heritage.

The first season of the collection in February 2005 included running, training and swimwear. The following season saw the introduction of trail-running and rock-climbing and last spring tennis wear was included. In fall 2006, a winter sports category was also introduced. “We have a lot of ideas and there is more to come,” Heike Leibl, head of product for Adidas by Stella McCartney, said. “What we continuously find out is that this target consumer is not just doing one sport.” The forthcoming spring 2007 collection will include all the former categories, with an emphasis on tennis. The silhouette will include higher waists and pleats, reminiscent of the Fifties. The new line will launch in February of next year and will be delivered to 600 points of sale, including Adidas Sports Performance Stores, Stella McCartney boutiques, high-end department stores and select specialist sports retailers. The collection will also be available online via the shopadidas.com website. Prices will range from $25 (£13) for a tennis wristband to $250 for a running jacket. Meanwhile, gym studio apparel will start at $85 and run through to $135, while yoga wear prices will range between $100 and $125. Footwear prices will vary from $120 to $145.

www.shopadidas.com
25 August 2006

Adidas H1 exceeds expectations

German sporting goods group Adidas reported better than expected first half results, thanks to the World Cup. It has raised its sales projection for its Adidas brand in 2006 to the low double-digit range. Sales rose 49 percent to €4.89 billion since the group acquired US brand Reebok in January. The consolidation of Reebok and strong performances from the Reebok and TaylorMade golf brand helped boost sales. The Adidas brand sales rose 17 percent to €3.31 billion, while TaylorMade sales gained 32 percent to €464 million. Excluding Reebok, group sales rose 19 percent to €3.8 billion, while profits rose only 4 percent to €348 million due to the Reebok acquisition.

Reebok, which has been suffering weak sales, did show an improvement in its order backlog, which was reduced by 13 percent. Adidas has been working hard at improving its performance, but group gross margin dropped 3.7 percent to 44.8 percent, largely because of the Reebok acquisition. “Due to its strong presence in North America, where average gross margins are lower than in other regions, Reebok carries a significantly lower gross margin than the group average,” the company said in a statement. Gross profit for the group rose 42 percent to €2.19 billion. Reebok excluded, Adidas gross profits gained 18 percent to €1.823 billion. Operating profits increased 18 percent to €420 million.

www.adidas.com
9 August 2006

Big plans for Adidas for Beijing Olympics

Adidas plans to overtake Nike in the vital China market by the 2008 Beijing Olympics, with a programme of accelerated store openings and sponsorship deals supported by its acquisition of the Reebok brand, CEO Herbert Hainer recently said. Adidas plans to open an average of 1.5 new stores a day in China over the next two years as part of a plan to double its current 2,500 adidas-brand stores in the country by 2010, said Hainer.

Adidas's $3.8bn acquisition of Reebok is also important to adidas's China plans, Hainer noted. It plans to speed up the rollout of Reebok outlets in China, opening 200-250 stores a year and aiming for a total of 1,500-2,000 Reebok-brand stores in China. Reebok currently has 50 stores in China.

Star basketball player Yao Ming is sponsored by Reebok and should be wearing the company's shoes during the Olympics, even though Nike is the apparel sponsor for the Chinese basketball team.

Adidas has made the significant investment to sign up as an official Olympics sponsor. According to industry estimates, the company shelled out a record $80m primarily for the privilege of having all athletes sport adidas's three-stripe logo when they step on the winning podium. adidas won't comment on how much it paid for sponsorship.

8 August 2006

Adidas realizes €1.2bn football sales

Sporting goods retail giant Adidas has generated sales of €1.2 billion of football products this year, up 30 percent from 2005. The group had originally predicted sales of €900 million. The company sold 15 million Match Ball 2006 footballs, compared with a mere 6 million during the World Cup in 2002. A record three million replica football jerseys were sold, including 1.5 million of which were of the German national team. During the World Cup in 2002, Adidas sold 1.5 million jerseys and 250,000 German jerseys. “Even before the games end, Adidas is already a clear World Cup winner. We exceeded all our football and business goals for the World Cup,” said Chairman Herbert Hainer, adding, “One trend confirmed at this year's World Cup is that fans are going to the games in the jersey of their team. Our products are scoring with consumers, and this success is translating into market share gains.”

During the first quarter of 2006, Adidas had a market share of 37 percent in the European market, 46 percent in the US market and 51 percent in the German market, thereby making it the market leader across the board.

www.adidas.com
29 June 2006

Adidas on top form for World Cup

Adidas is expecting to sell 15m balls during the World Cup. From the £6 mini-version to the £75 match ball – the sporting giant expects to sell as football fever sweeps the globe ahead of the tournament's opening next month. If Adidas hits the target it would be a world-beating performance, according to the Guardian. In 2002 Adidas, which has provided the official World Cup ball since 1970, sold 6m. This time it expected sales of 10m but the chief executive, Herner Hainer, told a German newspaper that estimates were up 50%.

"It's totally new, innovative," enthuses a spokesman. "A totally new design." It is made of 14 synthetic foam panels that are thermally bonded, not stitched together. One result is that the ball absorbs very little water - 0.1% of its weight, apparently - during a game played in wet weather.

However, forecasting demand for World Cup products is notoriously tricky. In 2002, when the tournament was held in Japan and South Korea , Germany was tipped for a relatively early exit but went on to make the final. That left Adidas in big trouble. By the time the German team had qualified for the semi-finals, retailers had run out of replica shirts.

This time the company has had 100 people working for two years on its World Cup products - and will, no doubt, have taken account of the tournament's history of strong performances by host countries. "The World Cup business is going fantastic and is beating all our expectations," said Mr Hainer. That certainly scored with investors and today's first-quarter results are expected to make them even happier.

10 May 2006

Adidas makes plans for Reebok

German sporting goods giant Adidas says it has big plans for Reebok. It is going to focus on expanding the branded apparel business for the US company it acquired for $3.8 billion this year by buying back distribution and tweaking its image. Adidas is predicting net income double-digit growth for the next three years, 20 percent in 2007, partly thanks to its acquisition of Reebok. The combined sales of the group are $11 billion.

“I called the Reebok acquisition a ‘once-in-a-lifetime opportunity' and I hold firm to this statement,” chief executive and chairman of the Adidas Group, Herbert Hainer said during a press conference. Hainer took the opportunity to announce that Adidas has replaced Reebok as the official apparel supplier to the NBA (National Basketball Association). The partnership is valid globally for 11 years and will allow Adidas to design, manufacture and market NBA apparel and footwear in the US, Canada, Europe and Asia.

“At first glance, the NBA deal may look like a loss for Reebok, but it's not,” Hainer said. “It caters to the group on a worldwide level and we now have to look at how we can get the best benefits for the group.”

Adidas' main motivation for acquiring Reebok was to enter the US market, where rival Nike dominates. The industry had already speculated that Adidas would take over some of Reebok's sponsorship deals, but the recent announcement has some industry specialists concerned. Reebok, however, has freed up funds to use for new sponsorships, such as with footballer Thierry Henry. Reebok is recommitting to individual players rather than teams.

Recently, Reebok has experienced a slowdown in US sales due to uncertainty and weak sales of its classic footwear. Its orders at the end of last year were down 22 percent from the year before. Adidas regards branded apparel as it biggest global growth category. The group's goal is annual sales of €100 million by 2009. Paul Harrington, Reebok chief executive, said that Reebok would update its design and quality. Hainer added that Reebok's apparel strategy had been off-kilter till now, but said that Adidas would apply its experience and “considerable talents” to the Reebok collections.

Adidas also plans to buy out Reebok's distributors and global joint venture partners. Hainer believes owning distribution guarantees a consistent global position and long-term commitment to the brand. He estimates annual revenues from Reebok to be at least €200 million by 2009. By that year the group aims to generate €500 million in extra revenues from the deal and €175 million in cost savings.

www.adidas.com
12 April 2006

Adidas extends McCartney contract

German sporting goods giant Adidas is extending Stella McCartney's contract until 2010. The Adidas by Stella McCartney collection, which was to end next year, has proved to be a great success for both parties. The fashionable sports line is Adidas' top performing range with products like off-the-shoulder sweatshirts, cut-out bathing suits and tennis dresses with ruffles. With the introduction of the line, the retailer has managed to expand his market.

Although Adidas declined to reveal the sales figures for the line, industry experts have estimated first year revenues at more than $15 million. “The world wide success of this collection continues to exceed our expectations,” creative designer for Adidas, Hermann Deininger, said in a press release. “Adidas by Stella McCartney has obviously filled a gap.”

The collection is sold in approximately 400 stores world wide. Prices range from $25 to $300. Meanwhile, the division has signed a contract with tennis talent Maria Kirilenko, who will wear Adidas by Stella McCartney during all her tournaments.

www.adidas.com
21 March 2006

Adidas rise in 2005 profits

Sporting goods giant Adidas reported a 24.6 percent rise in pre-tax profit for the year. This despite costs related to the takeover of Reebok in the fourth quarter. Fourth quarter net income dropped from a profit of €18 million (£12.3 million) last year Although the integration of Reebok proved difficult, with the latter's sales falling 5 percent to $930 million (531.6 million) in the fourth quarter and orders plummeting 22 percent, the group's Adias and TaylorMade brands showed strong performances. Both brands posted double-digit growth, with improvement concentrated in North America, Asia and Latin America. “Adidas and TaylorMade are the strongest they've been in years,” said chief executive Herbert Hainer. “Many of our current efforts will now focus on turning around the Reebok brand.” He said Reebok sales would reach €2.8 billion in 2006.

Gross margins rose 48.2 percent on sales up 0.2 percent from the previous year. Pre-tax profits for the year amounted to €655 million on sales up 13.2 percent to €6.6 billion. “The acquisition of Reebok and the divestiture of Salomon clearly generated a lot of attention for us, and we also completed an impressive turn-around in our business in North America,” said Hainer. “With all these changes, we increased our focus on the group's core activities and delivered, once again, record financial results.”

www.adidas.com
2 March 2006

Adidas's Olympic gaffe

Adidas has made a blunder of quite Olympic proportions. The sportswear giant, which sponsors the German Olympic team, provided 30 German skiers participating in the winter games with caps in Belgian national colours, according to Reuters.

The company provided the athletes with caps in Belgium's black-gold-red instead of Germany black-red-gold. “We regret this technical mistake and do apologize to all athletes,” said a spokesman for the company. The colour-appropriate caps are currently being produced and will arrive in Turin next week.

www.adidas.com
16 February 2006

Adidas to reposition Reebok

German sporting goods giant Adidas has plans to reposition newly acquired Reebok as a performance brand. Herbert Hainer, Adidas chief executive, revealed the plans to a strategic footwear forum organised by the World Shoe Association. “There is no doubt that we will position Reebok back more to a performance brand than it has been over the last two to three years,” said Hainer, speaking by satellite. “Reebok was one of the first to bring a lot of technology into the market.”

Hainer maintained that Reebok and Adidas would retain their own separate brand identities. “We will keep the two brands separate, because we believe both have their own identity, heritage and consumer base.” The FT reported Rob Langstaff, president of Adidas America, as saying that the sporting giant regarded Reebok as “sibling rivalry”. “We want to compete at the market place…and both of us will become better as a result.”

Adidas and rival Nike face the challenge of growing their brands in a mature market. Hainer said growth in the athletic footwear market would need to be generated by a combination of fashion and technology. “Innovative, technologically driven product really can make a difference in the US market. If you bring new technology, new innovative product to the market, the consumer is ready to spend the money.”

www.adidas.com
14 February 2006

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