As sportswear rivals jostle for position ahead of next year’s Paris Olympics, Adidas aims to position its brand in smaller events such as running, climbing, skating and BMX.
After a high-profile fallout with Ye, the artist formerly known as Kanye West, ended his highly profitable Yeezy shoe line, Adidas CEO Bjorn Gulden is seeking to revive its image.
The Olympic Games are a major arena for global sportswear giants, which spend millions on sponsoring athletes, sports federations and national teams, as well as on marketing events.
Turning to sports rather than celebrities is a key part of the game plan set by Golden, who took over as Adidas CEO at the start of 2023, to turn around its fortunes – a tactic that will face its biggest international test at Paris 2024.
“For whatever reason the old strategy here was to focus deeper on fewer sports, and I, conversely, want Adidas back in smaller sports and to be visible,” he said.
He added in an interview conducted at Adidas headquarters in Herzogenaurach, Germany: “Focusing only on the four or five major sports in the first place is very easy, and it is stupid to be honest.”
Olympic success is a must if Adidas wants to regain the market share it has lost to competitors over the past four years and reward investors who have pinned their hopes on Golden.
Shares of Adidas, the second-largest sportswear group by global market share, have risen more than 50 percent so far this year, overtaking Nike and Puma, after two consecutive years of losses.
While Adidas’ main focus remains on major Olympic sports such as track and field, work on more specialized disciplines extends to design teams and generates ideas for more mainstream products such as running shoes, Golden said.
Breaking, which has its roots in hip-hop, also has streetwear and lifestyle appeal, while offering an opportunity to reach new audiences in key markets such as China, where the latest Olympic sport is popular, Golden said.
In June, Adidas signed a contract with Chinese Liu Qingyi, known as “B-Girl 671”, the world’s number one hurdler, but the competition is intense.
Nike is the official sponsor of the American, Japanese and Korean speed-breaking federations, and told Reuters that it had contracted 20 athletes. Puma also recently signed Chinese athlete Qi Xiangyu.
performance
As part of a drive to attract young people to the Games, Paris will also showcase mountaineering, skiing and freestyle BMX, which made their debut at the 2021 Tokyo Olympics.
While it is difficult to quantify the extent to which the Olympics will increase sports apparel sales, the Games help brands build a reputation for “performance” products used by elite-level athletes.
Adidas’ deals this year include BMX athlete Kieran Riley, the Brazilian Skating Federation and the Polish Olympic Committee, although Golden said its presence in Paris would not be as extensive as he would have liked, as Olympic sponsorship contracts last for several years.
“The Olympics are important for these brands in terms of showcasing their technology in each sport,” said Boris Radondi, who invests in sports companies at French asset manager DNCA.
“When these brands forget that they are a sports brand, the customer goes away. You can’t just be a lifestyle,” he added.
Puma is primarily focused on athletics, having already invested heavily as the official sponsor of the Jamaican Olympic Association, having signed Usain Bolt when he was 16 years old.
“We still need to focus on gaining market share in these areas,” Richard Tessier, Puma’s global brand and marketing director, told Reuters.
This year, Puma signed 35 new athletes in track and field disciplines ranging from javelin throw and long jump to 10,000 metres.
“For them, it is very important to stand out in track and field, and in the past they have chosen the best athletes,” said Radondi, whose fund owns shares in Puma.
With a sales volume about three times that of Puma, Adidas can spend on more athletes and more sports at the Olympic Games. In contrast, Nike can outspend Adidas.
But Kerryn Foster, head of specialist sports at adidas, said: “We continue to invest more and more in the Olympics as a company, not just in the event but in the lead up to it.”
For shareholders who backed Golden, the hope will be that his new approach at Adidas can strike gold.
Written by Helen Reid, Catherine Masters and Ananya Maryam Rajesh