Sports goods market worth billions: Adidas attacks Nike with this strategy - cio.de

Sustainably produced shoes, comfortable clothes and a focus on the target group of women: AdidasAdidas, the world's second largest sporting goods manufacturer, has already put the Corona crisis behind it mentally and wants to grow massively in the next five years - in terms of sales and profits. In the five years from 2021 to 2025, profits are expected to increase by 16 to 18 percent, announced CEO Kasper Rorsted on Wednesday when presenting the company's medium-term goals. In terms of sales, growth of eight to ten percent per year is targeted for the same period. Top 500 Company Profile for Adidas

"The sporting goods industry will grow by 100 billion euros by 2025," said Rorsted, looking at the entire market. The sports market is growing twice as fast as overall economic output. China will be the largest growth market. In order to at least hold its position against world market leader Nike and other competitors, Adidas has created its own slogan as a motto for the next few years: "Own The Game" (roughly: "Control the game"). "We want to gain market share," said Rorsted.

Huge demand for casual wear

"More and more people are playing sports and staying active," said Adidas brand executive Brian Grevy. "We're seeing a huge demand for casual wear. And it's not going away." Adidas wants to pay special attention to the topic of sustainability. Nine out of 10 items are expected to be sustainable in materials and production over the next five years, Rorsted said. "Sustainability has been an integral part of Adidas' corporate philosophy for more than two decades. It is a direct expression of the company's purpose of transforming lives through sport," he said.

The products are to be made to a greater extent either from recycled materials or processed in a circular manner. By 2024, the company plans to only use recycled polyester in its products.

Focus on soccer, running, training, outdoors and athletic casual wear

In addition, the group wants to concentrate more than before on the core target groups - football, running, training, outdoors and sporty leisure clothing. Rorsted believes that 95 percent of future sales growth could come from these buyers. In addition, women should be emphasized more as a target group.

The Franconians want to invest more in their brand, but above all in digitization. By 2025, one billion euros will flow into improving online business. Thanks to the corona pandemic, online retail was already the clear growth driver last year - at times 70 percent of stationary shops worldwide were closed due to lockdowns. 95 percent are now open again. The proportion of sales from direct customer business is expected to increase to around 50 percent by 2025 and represent over 80 percent of the sales growth by 2025. "You have to be where the consumer is," said Rorsted. "And the consumer is mobile and digital." Everything about digitization on CIO.deTop companies in the retail sector

For the coming year, the management around CEO Rorsted calculates a profit of 1.25 to 1.45 billion euros in the ongoing business. The forecast no longer includes the US subsidiary Reebok, which is to be sold and will be classified as discontinued operations from the first quarter. Costs related to the planned sale are likely to reduce profit from continuing operations by around 200 million euros. "It's the right time," said Chief Financial Officer Harm Ohlmeyer. But he also spoke of a "tricky process" that the sale means. Reebok was "slightly positive" in 2020.

In 2020, sales and profits plummeted in connection with the Corona crisis. Sales fell by 16 percent to 19.8 billion euros, profit from continuing operations by almost 78 percent to 429 million euros. For comparison: Local rival Puma, number three in the industry worldwide, had to accept significantly less losses last year with a drop in sales of 1.4 percent (currency-adjusted) - but has also formulated more modest goals for the future. (dpa/rs)