Adidas Runs Circles Around The Competition

By Nate Valyo, International Business Writer

Adidas sales are continuing to rise in North America, leaving its two biggest competitors, Nike and Under Armour, struggling to keep up.

The German-based sports retail company is continuing to make its presence known in North America. Last Thursday, November 9, Adidas reported a sales growth of 31percent in North America. Nike, Adidas’ main competitor, reported a 3 percent decline in sales on their most recent earnings. Additionally, Under Armour reported a 12 percent decline in sales on their most recent earnings. Adidas passed Under Armour earlier this year to become the second largest sports retail chain in North America. Reebok, which is owned by Adidas, reported a 22 percent increase in sales during the same period.

President of Adidas North America Mark King told CNN Money that in order to be number one in the business, they have to dominate in the United States first. “We have more sports here,” King said. “Trends, media attention, the just overall hype around sports, the epicenter is America.”

Adidas has struggling to keep their foot in the door in North America, as Nike dominated sales. Two years ago, Adidas held about 5 percent of the U.S. market share. Today, it controls about 10 percent. Christopher Svezia, an analyst for private financial services firm Wedbush, claimed that “Adidas brought better innovation and marketing and invested a lot in North America.” Later adding, “At the same time Nike stagnated regarding innovation and product prices got too high.”

Given their recent successes, Adidas is still not as dominant as Nike. Adidas reported nearly $1.3 billion in sales in the last quarter. Nike came out on top with $3.9 billion. King stated that the market shares for each category have doubled, with the running category being especially successful. So while Nike still holds the crown, Adidas is making a strong push.

James Harden of the Houston Rockets and Von Miller of the Denver Broncos are two of the big-name athletes who have signed endorsement deals with Adidas. Additionally, celebrities like Kanye West and Karlie Kloss have also been sponsored by Adidas recently. The company also signed a deal with Major League Soccer and became an official partner of the NHL.

Adidas has taken an approach to catering to exactly what the market demands, and according to Svezia, “Customers started wanting more casual style and retro looks.” King claims that the brand’s strategy is now clicking into place, and that “we are focusing on what the consumer wants.”

According to Business Insider, Adidas’ lifestyle running shoes are what consumers deem high fashion, which is different from the “clunky basketball shoes that Nike and Under Armour had made their bread and butter.” The Pure Boost, the Alpha Boost, and the Ultra Boost are three of Adidas’ most popular shoes on the market and are responsible for much of the growth. Additionally, Adidas’ Stan Smith shoes, named after the tennis player who famously wore all-white tennis shoes, are making a comeback, adding more fuel to the Adidas fire.

Mark King recently announced plans for the creation of a new office in downtown Los Angeles to keep a company goal of making an impact in large U.S. cities. Also, as consumers are turning to the internet for shopping, Adidas has created a shopping app for their customers.

 

A version of this article appeared in the Tuesday, November 21st print edition.

Contact Nate at

nathaniel.valyo@student.shu.edu

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