Adidas Predicts Record Soccer Sales as Euro 2016 Boosts Businessby
Sportswear maker expects division revenue of 2.5 billion euros
Company plans to sell 1.3 million German national jerseys
Adidas AG forecast record soccer sales this year as business is boosted by the monthlong European championship being played in France.
The sportswear maker predicts it will sell 2.5 billion euros ($2.8 billion) of soccer shoes, shirts, balls and other equipment, it said Wednesday. That would exceed last year’s 2.2 billion euros and 2.1 billion euros of revenue in 2014, when the German team that Adidas sponsors won the World Cup.
“We have gained market share in key markets and our footwear offering is resonating well among our young target audience,” Chief Executive Officer Herbert Hainer said. “We spend a load of money on soccer, but soccer sells other products,” including so-called lifestyle sneakers and apparel, he said at a press conference in Paris.
The 24-team Euro 2016 tournament started last week and runs through July 10, making this summer a key selling season for Adidas and rivals Nike Inc. and Puma SE in the $5 billion worldwide soccer-gear market. Adidas, undergoing a resurgence after two uneven years, said it plans to sell 1.3 million German national jerseys this year, up 30 percent on the 1 million it sold the last time the European championship finals were held in 2012. In the 2014 World Cup year, Adidas sold 3 million Germany jerseys.
The company is continuing its decades-long association with the German national team, even as it cuts ties with European league clubs to redirect marketing spending toward players that can influence young consumers through their Twitter and Instagram accounts. Germany won its first match against Ukraine June 12 and plays Poland tonight in a game in Saint-Denis outside Paris.
Adidas is about one percentage point ahead of Nike in soccer market share in key western European markets with a 36 percent share, according to Hainer, who is winding down his 15-year tenure as Adidas’s CEO. Kasper Rorsted, who is joining from German household-products maker Henkel AG, will succeed him on Oct. 1.
Rorsted will continue the company’s year-old strategy of directing spending at influential urban markets around the world and rolling out new sneaker designs to stores every few months, Hainer said at the press conference.
“If he doesn’t agree with the strategy then he has to throw the other four managing directors out,” Hainer said. “And the strategy seems to be going well.”
Rorsted has visited Adidas’s Bavarian headquarters and will accompany Hainer on calls to big retailers and the world and European soccer organizations in his first weeks, he said.
Even as soccer sales surge, Adidas is trying to counter discounting that’s seen retailers cut the price of Germany jerseys to boost business during a wet spring in Europe.
“Of course we don’t think that’s right at all,” said Hainer, noting that sales gather pace as the tournament progresses. “We think the prices were reduced too early.”