About Adidas North America, Inc.

From famous athletes to school kids, adidas wants to help everyone get in the game. The German sportswear company sells sports shoes, apparel, and equipment sporting its iconic three-stripe logo in more than 160 countries. One of the top sporting goods manufacturers worldwide (along with NIKE and Under Armour), adidas focuses on football, soccer, basketball, running, and training gear and apparel as well as lifestyle goods. Its other major brand, Reebok, sells fitness and gym apparel. All in, adidas sells adidas and Reebok-branded products through more than 2,500 owned stores, as well as a franchise network and via a wholesale channel. Founder Adi Dassler, brother of PUMA creator Rudi, began making shoes in Germany in the early 1920s.

Operations

adidas sells adidas and Reebok-branded clothing through 2,500 stores worldwide. It also has a franchise network of 13,000 monobranded stores and distributes products wholesale to around 150,000 third-party retailers. Its e-commerce operation reaches customers in 40 countries worldwide via adidas.com, Reebok.com, and its app.

adidas-branded goods span performance sportswear and casual fashion. adidas makes shoes, apparel, and equipment for soccer, running, football, basketball, rugby, and more. Its sports-fashion product lines include adidas Originals and adidas Neo.

Reebok is a fitness brand catering to runners, gym-goers, and other fitness fanatics. Its Reebok Classics range serves casual fashion for customers outside the gym.

Footwear is adidas' biggest and fastest-growing product category. It generates around 60% of total sales, and includes the top-of-the-line Boost range. Apparel accounts for around 35% of sales, with the remainder chalked up to hardware (balls, bags, and fitness equipment).

The Runtastic business is a social network platform that allows for the gamification of sports, and includes software, hardware, and services.

Geographic Reach

Based in Bavaria, Germany, adidas has a well diversified global sales footprint. Western Europe remains its biggest territory at around 30% of total sales, while fast-growing North America and Greater China account for around 20% each. The Middle East, Africa, and Other Asia (excl Japan) generates around 15%, Latin America some 10%, and Japan around 5%.

adidas sources nearly all its merchandise from Asia.

Sales and Marketing

Sophisticated product positioning in its footwear category in particular grants the adidas brand high value in the functional sportswear and premium casual fashion market segments. The Yeezy 350 casual sneaker for instance, designed in partnership with Kanye West, fetches £350 for a basic pair but equally the company can sell budget £20 trainers without degrading its three-stripe brand equity.

adidas spends half its marketing budget on sponsorship deals, which range widely across sports teams, events, and sportspeople. Soccer is adidas' most extensive category and includes sponsorships of the soccer World Cup, the German national soccer team, club teams Bayern Munich and Manchester United, as well as hundreds of leading players across the world, including Lionel Messi, Paul Pogba, and Gareth Bale. It also has sponsorship arrangements in basketball, tennis, rugby, boxing, and a large number of Olympic sports.

Financial Performance

Note: Growth rates may differ after conversion to US Dollars.

Over the last ten years adidas has charged to the front of the pack and grown its revenue nearly every year (its only stumble was in 2013) as it becomes more competitive in footwear and reaches new international customers.

In fiscal 2017 revenue growth accelerated 15% to €21.2 billion as it grew by double-digits in all regions except Russia/CIS. A 35% currency-neutral increase in adidas-branded goods helped the North America region grow by €863 million -- despite a 15% fall in Reebok sales due to store closures. Greater China added €779 million to revenue amid double-digit growth in the running, training, and basketball categories, as well as in the casual lines adidas Originals and adidas NEO. Reebok grew strongly in the country as well.

By product category, while Apparel and Hardware both posted top-line growth, nearly all adidas' revenue growth in 2017 came from footwear sales. Footwear increased by €2.3 billion to €12.4 billion.

Net income increased 8% to €1.1 billion thanks to higher net revenue, partially offset by losses on the disposal of the TaylorMade golf business and CCM Hockey.

Cash from operations increased 22% to €1.6 billion thanks to higher net income and adjustments to reconcile losses on disposals.

Strategy

Despite continued strong performances in sportswear and apparel, adidas' golf businesses -- TaylorMade, Adams Golf, and Ashworth -- all performed poorly and saw revenue erode from $1.7 billion to $500 million in the four years to 2017. As a result, adidas cut its losses and sold all three in 2017. While it will continue to produce golfing clothes and equipment, the company's primary focus is now on the adidas and Reebok brands.

The Reebok brand strategy is based on its transformation to a general sports apparel retailer to focusing entirely on sports fitness -- running, gym, combat sports, and Crossfit. Reebok's "Muscle Up" growth plan is target at lifting flat revenue growth in North America in particular, and the company created a territory-specific team and moved its regional HQ to Boston. Additionally, Reebok has an unwieldy store network and plans to close fully 50% of its brick-and-mortar sites. It is also rationalizing its wholesale strategy to cover only those retailers that boost Reebok's brand equity.

On the marketing front, adidas will continue to increase marketing spend in absolute terms but withdraw to a degree from sponsorships, the costs of which are increasingly subject to intense bidding wars between adidas and its rivals. It will reduce sponsorship spend from 50% of its marketing budget to around 45% and concurrently increase its budget for digital, advertising, point-of-sale, and grassroots activations (pick-up sports leagues etc). It is also developing its non-sport partnerships, particularly with musicians Kanye West and Pharrell Williams and fashion designers Yohji Yamamoto, Stella McCartney, and Alexander Wang.

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Adidas North America, Inc.

5055 N Greeley Ave
Portland, OR 97217-3524
Phone: 1 (971) 234-2300

Stats

  • Employer Type: Public
  • Senior Merchandise Manager: Nick Arneson
  • Licensed Property Manager: Alan Recker
  • Assistant Store Manager: Nathan Solly
  • Employees: 2,000

Major Office Locations

  • Portland, OR

Other Locations

  • Chandler, AZ
  • Camarillo, CA
  • Commerce, CA
  • Folsom, CA
  • Irvine, CA
  • Milpitas, CA
  • San Francisco, CA
  • Vacaville, CA
  • Castle Rock, CO
  • Clinton, CT
  • Ellenton, FL
  • Miami, FL
  • Miami Beach, FL
  • Orlando, FL
  • Saint Augustine, FL
  • Woodstock, GA
  • Waipahu, HI
  • Edinburgh, IN
  • Michigan City, IN
  • Simpsonville, KY
  • Annapolis, MD
  • Howell, MI
  • Albertville, MN
  • Branson, MO
  • Chesterfield, MO
  • Atlantic City, NJ
  • Elizabeth, NJ
  • Jersey City, NJ
  • Paramus, NJ
  • Tinton Falls, NJ
  • Las Vegas, NV
  • Sparks, NV
  • Elmhurst, NY
  • West Nyack, NY
  • Aurora, OH
  • Monroe, OH
  • Saint Paul, OR
  • Troutdale, OR
  • Grove City, PA
  • Pottstown, PA
  • Bluffton, SC
  • North Charleston, SC
  • Allen, TX
  • Cypress, TX
  • Mercedes, TX
  • Park City, UT
  • Leesburg, VA
  • Williamsburg, VA
  • Johnson Creek, WI
  • Lake Delton, WI
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