Adidas
A marketing victory for Nike is a business win for Adidas
The choice to replace 阿迪达斯 with 耐克 as the supplier of kit for the German football team from 2027 to 2034 was a purely commercial decision by the German Football Federation (DFB). According to reports in the German press, Nike offered $109m to kit out the Nationalmannschaft, twice as much as its German rival.
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Bjorn Gulden , who took over as chief executive of 阿迪达斯 at the start of 2023, chose finance over football. Its share price has risen by around 40% over the past 12 months. Its operating profit may pale in comparison with Nike's, but it came as a pleasant surprise to analysts, who had forecast a loss. Mr. Gulden expects an operating profit of Euro 5oom this year. He has mended Adidas's dysfunctional relationship with retailers. He has increased the production of Gazelle and Samba, two classic Adidas trainers popular with European and American fashionistas, ten-fold. and he has found an elegant solution to Euro $1.2bn in unsold stock of Yeezy.
Nike, for its part, needed a win. It recently warned that its sales will be clobbered this year by On and HOKA (DECK US). In China, it faces competition from home-spun rivals such as ANTA Sportswear A renewed focus on sport is one way that John Donahoe is trying to revive the swoosh, along with reducing inventory and improving relations with wholesalers. He also announced $2bn in cost cuts over the next three years including 2% cut of Nike's worldwide workforce. One area where Mr. Donahoe's axe will not fall is marketing. He pumped a cool $1bn into promoting Nike's brand in the last quarter, 10% more than in the previous three months. Germans should be praising Adidas's pfennig-pinching. After all, what is more Heimat than thriftiness?
Our German Consumer analyst Felix Jonathan Dennl at Bankhaus Metzler follows Adidas and the related sector closely. Please let us know if you are interested in speaking with him.