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sporting brands

Adidas Ready to Make History in 2013

Posted by Mark J. Miller on December 21, 2012 03:03 PM

This was supposed to be an off year for Adidas. After all, its Reebok subsidiary was set to lose the NFL apparel deal that it had had since 2001 to Adidas archrival Nike. Plus, NHL players wear Reebok and that league’s season hasn’t started yet due to financial differences between the owners and players. That’s not a help to an area that generally brings in $132 million annually. So last month, CEO Herbert Hainer had to tell investors that the company was adjusting its sales expectations for the year.

However, the Financial Times notes, Hainer also had some good news to share: “We will see record sales and earnings in 2013,” he said. “All that I hear from the markets is that we are winning market share in each and every country.” And, adjustments or no, things didn’t go badly for the sportswear giant this year. Its stock price is up 40 percent from the same point last year.

The FT attributes the stock price staying strong for Adidas partially because of the strong confidence of Hainer and his “shrewd instinct about where the sports goods business must go next to expand its appeal to customers.” Serving an aging market as well as helping people deal with the obesity epidemic are two areas that are helping the bottom line at Adidas.

In addition to continuing partnerships including its soccer tie-ins, the company is getting a little free publicity from Robert Griffin III, the stellar rookie quarterback for the Washington Redskins, who showed up at a postgame interview last week wearing Adidas garb, even though the NFL has its deal with Nike now. That little clothing mistake will cost Griffin $10,000 in a fine by the league. That’ll put a little dent into the $21 million contract he signed in July.

While plenty will be amused by Griffin III’s actions along with the new Adidas Top Ten 2000 shoes that were “inspired by the Tim Burton film, A Nightmare Before Christmas, but a few of its former suppliers in China aren’t exactly fans of the organization right about now.

Back in August, Adidas reportedly told five Chinese suppliers that had provided about 8 million garments last year that the company would be ending their relationships “in an attempt to become more efficient by restructuring its business” in the country.

Adidas claims that it has met all of its contractual needs in the transition but the suppliers “are not satisfied with the compensation, especially because machines and software systems were tailored for Adidas.” It's an issue that's likely to not be resolved over the new year — let alone by the Chinese New Year.

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