Adidas

Aktivs

The concern has 8 enterprises in Germany and over 25 subsidiaries in other countries, including France, Great Britain, USA, Canada, South Africa.

Until 2009, it combined such brands as:

• Adidas - clothing, shoes and accessories for athletics, American football, tennis, fitness, football, basketball, sports walking and much more.
• Salomon - alpine skiing and equipment, tourism. (After 2H 2008, withdrew from Adidas Ltd.)
• The Mavic are seamless bike rims.
• Bonfire Snowboarding Company - snowboards, equipment.
• Arc'Teryx
• Maxfli

For 2011, Adidas owns:

• Reebok (sold in 2021)
• Rockport - classic and casual shoes
• CCM - hockey equipment.
• Taylor Made Golf is a golf gear.

Business in Russia

Main article: Adidas Russia

Performance indicators

2023: First losses since 1992 - €58 million

In 2023, the manufacturer of sports goods Adidas received a net loss of €58 million. For comparison, a year earlier, the company registered a net profit of €254 million. Thus, Adidas suffered losses for the first time since 1992, as stated in the financial report published on March 13, 2024.

The company attributes the losses to high taxes. In addition, the current macroeconomic situation has a negative impact on business. Declining demand and oversaturation of stores in the United States affect sporting goods companies. Adidas notes that North American sales fell 16% from 2022.

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Adidas revenue in 2023 decreased by 5% compared to the previous year and amounted to approximately €21.4 billion. The company associates the decrease in this indicator, among other things, with the negative impact of the exchange rate difference in the amount of more than €1 billion due to unfavorable changes in exchange rates and an increase in the cost of production.

The decline in Adidas sales is also partly due to the severance of cooperation with American rapper Kanye West. In October 2022, the company ended its partnership with the musician and suspended sales of the brand's high-yield Yeezy sneaker line, co-created with West. Revenue from clothing sales in 2023 decreased by 6%. The company's e-commerce business shrank 5% - partly due to the Yeezy brand situation.

At the same time, Adidas sales in China in 2023 rose by 8% due to a significant increase in wholesale supplies and sales in their own retail stores. Asia Pacific revenue rose 7% year-on-year thanks to its own distribution channels. In Latin America, as noted in the report, sales rose 22%.^[1]

2022: Loss of €100m in quarter due to withdrawal from Russian market

Adidas in the second quarter of 2022 lost about 100 million euros in revenue due to the suspension of activities in Russia. The company announced this as part of its financial statements published in August 2022.

On March 9, 2022, Adidas suspended the site and application in Russia. A few days later, the chain's retail stores closed.

In May 2022, the Izvestia newspaper wrote that Adidas was completing a logistics adjustment in order to return to work in the Russian Federation. The fact is that earlier all deliveries to Russia were carried out from warehouses in Europe, and now the company has rented a site for this in Turkey. At the same time, the interlocutor of the newspaper admitted that Adidas would sell Russian business, as other companies did.

Later, the Mash Telegram channel announced plans for the sports brand to open Russian stores in September 2022.

On the indicators of Adidas, in addition to leaving the Russian market, also said the locks introduced due to the COVID-19 coronavirus pandemic in China and Vietnam. In total, the company missed 300 million euros in revenue in the second quarter of 2022.

Adidas's total revenue for April-June 2022 increased by 5% compared to the same period in 2021 - to 10.9 billion euros. Adidas's net profit decreased by 7%, to 360 million euros.

The macroeconomic environment, especially in China, remains challenging. Recovery in this market due to continued restrictions related to COVID-19 is slower than expected, "added Adidas CEO Kasper Rorsted.

At the same time, the company notes good results in Western markets - for example, revenue in North America increased in the second quarter of 2022 by 37% compared to a year ago. The increase in revenue was caused by higher sales in the Football, Running and Open Sport segments amid the resumption of major sporting events. ^[2]

2020

Revenue from sales of sports shoes - $13.7 billion

Largest Sports Brands Revenue from Footwear Sales, 2017-2020

Revenue decrease by 16%, to 19.8 billion, profit - by 78% (429 million euros)

At the end of 2020, the revenue of the German manufacturer of sportswear and footwear Adidas decreased by 16% compared to 2019 - from 23.640 billion euros to 19.8 billion euros. The company's profit decreased by 78%, reaching 429 million euros, while in 2019 the figure was 1.918 billion euros.

We have never had a year like 2020. But for all the challenges we faced, we were committed to making Adidas a better place. This is the result of great team efforts, all of our more than 60 thousand employees. I am more than grateful for their continued support and great commitment, "said Adidas CEO Kasper Rorsted.

Adidas revenue falls 16% in 2020

Rorsted drew attention to the growth of online sales of the company, where an increase of 53% (more than 4 billion euros) was recorded. Revenue from the sale of shoes in 2020 fell by 18% to 11.128 million euros, while in 2019 the figure reached 13.521 million euros. The sale of clothing brought in 7.687 million euros, which is 14% less than in 2019 (8.963 million euros). Sports equipment and accessories in 2020 brought Adidas 1.028 million euros, which is 11% less than in 2019, when this segment accounted for 1.156 million euros.

Adidas footwear, clothing, accessories sales in 2019-2020

The company's revenue in Russia and the CIS in 2020 fell by 11.3%, to 584 million euros, a year earlier the figure was 658 million euros. In Europe, the German company's revenue amounted to 5.320 billion euros, which is 12% less than in 2019 (6.071 billion euros). In North America, revenue reached 4.762 billion euros - this is 10% less than a year earlier, then the figure was 5.313 billion euros.

Adidas Sales Volumes by Region for 2019-2020

The leader is the Asia-Pacific region, where sales of sports goods amounted to 6.546 billion euros, which is 18% less than in 2019 (8.032 billion euros). A collapse of 60% was recorded in Latin America - 1.660 billion euros in 2019 against 998 million euros in 2020. In emerging markets, there is also a 23% decline - in 2020 the company received 998 million euros, in 2019 - 605 million euros.^[3][4]

History

2024: Top Adidas executives took millions of euros in home and kickbacks from suppliers

On June 16, 2024, it became known that the German company Adidas initiated an investigation in response to the emergence of information about multimillion-dollar bribery in its Chinese division. It is alleged that Adidas top managers took large amounts of money from suppliers at home.

According to the Financial Times newspaper, information about bribery was released in an anonymous letter, which was allegedly sent by Adidas China employees. It mentions several Chinese Adidas workers, including a senior manager in charge of the country's marketing budget, said to be €250 million. According to the authors of the letter, the mentioned persons received kickbacks from third-party service providers with whom cooperation agreements were concluded. We are talking about amounts of "millions of euros" and about real estate.

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Adidas confirmed receipt of an anonymous document describing "potential violations" of legislation in China. The German sportswear company said it was looking into the case with outside lawyers. At the same time, Adidas emphasizes that it cannot provide additional information until the investigation is completed.

Adidas takes allegations of possible violations of legal requirements very seriously and seeks to comply with legal and internal norms and ethical standards in all markets of presence, the company said in a statement.

The Financial Times notes that the authors of the letter did not provide significant evidence of their accusations. However, according to Adidas insiders, the compilers of the document are well aware of confidential issues affecting the company's activities. If the Chinese employees are proven guilty, Adidas will take the necessary measures.^[5]

2021: Adidas sells Reebok to Authentic Brands Group for €2.1 billion

Adidas AG said it agreed to sell Authentic Reebok Brands Group for up to 2.1 billion euros ($2.47 billion), dollars about 15 years after acquiring the American fitness brand and trying to modernize it.

The German sporting goods company managed to improve Reebok's business, but its sales lag behind those of Adidas itself and hurt the group's profits.

2020

The popularity of stamps in Europe

2018

Plans to close all stores and focus on online trading

In April 2018, it became known about Adidas plans to close retail stores and bet on online trading. The CEO of Kasper Rorsted believes that the day will come when the German manufacturer of sportswear and equipment will sell goods only on the Internet.

Our site is the most important store for us in the world... When you have a large retail chain, you supply shoes with pallets. But when you sell directly to the end customer, you send one pair of shoes, some socks and shorts, "Rorsted said in an interview with the Financial Times.

According to the head of Adidas, the company will reduce the number of stores, and the remaining points will become better. The retailer has already begun to close offline stores, in 2019 their number will decrease, but slightly. In the future, it is planned to completely abandon physical retail in favor of an online channel.

Adidas plans to grow online trading by closing retail stores

In 2017, Internet sales brought the company 1.6 billion euros. According to Adidas plans, by 2020 this figure will grow to 4 billion euros. For 2018, the clothing manufacturer planned 900 million euros of expenses, and a lot of these costs will go to digital operations, including logistics and infrastructure: warehouses for storing and delivering goods ordered by online buyers.

By the beginning of April 2018, Adidas has 2,500 stores around the world, as well as 13 thousand single-brand salons opened under a franchise.

Earlier it became known that Adidas reduced the number of employees in Russia and the CIS by 26% in 2017. By December 31, 9.1 thousand people worked in the region - 16% of the total staff of the company.

In 2017, Adidas announced plans to close up to 160 stores in Russia. The company noted that Russia remains the only region of Adidas presence with falling revenue.^[6]

In the top ten most expensive German brands

In January 2018, the company entered the top ten most expensive German brands, according to a rating compiled by advertising and communication holding WPP and marketing agency Kantar Millward Brown. Read more here.

2017: Closure of Wearable Electronics Development

In mid-December 2017, it became known that Adidas was closing the Digital Sports business unit (DSB), responsible for developments in the field of wearable electronics.

We have revised our strategic approach to digital, focusing on the digital experience. In this regard, we decided to stop the work of a separate unit. Instead, we intend to integrate digital technologies in all areas of our business. We will continue to improve in the digital sphere, just in a more integrated form, - explained the representative of Adidas in an interview with Just-Style.[7]

Adidas shuts down wearable electronics development department

The Adidas solution could lead to a reduction of 74 employees, including specialists in data analysis and processing, design, algorithm development, software and hardware, according to Women's Wear Daily (WWD). At the same time, in an interview with reporters, a spokeswoman for Adidas said that employees would try to transfer to other positions within the company.

According to WWD, Adidas first took up wearable electronics back in 2001, when it began to produce sports shoes with built-in sensors. The decision to close the division was made as part of structural restructuring measures in order to focus on the Runtastic fitness platform acquired in 2015 and the updated Adidas mobile application for online purchases.

At the same time, a spokeswoman for Adidas noted that the company is rapidly expanding its North American business, with the number of employees at its Portland headquarters more than doubling in three years to reach 1,700 by the end of 2017.

We have to make such strategic decisions, but this certainly does not reflect our rapid growth in North America, she stressed.[8]

2007: Combining sport Style and sport Heritage destinations

Adidas Performance is a company direction that combines technologies that facilitate training for athletes, and is characterized by such indicators as modernity of equipment for sports, innovation, revolutionary technologies, "smart products."

The direction of adidas Sport Heritage (better known as Originals) was founded in 2001, however, before that, the company existed in an "unformed" form all the prerequisites and features of this direction. Originals is a destination that incorporates all the fashionable and stylish trends from the world of sportswear that exist at the time of the collection's release. As a rule, in Originals there are no or extremely little sports developments of Adidas, since the direction is intended for everyday wear, and not for sports and fitness.

Adidas Sport Style (Adidas Style) - the direction was created in 2002, and collects author's design works, the fruits of the company's cooperation with famous designers of the fashion world. Products of this direction combine the convenience and practicality of sportswear and the style of casual clothing. These are models for active, athletic people who at the same time prefer to always look beautiful and fashionable. Adidas itself officially declares that the Style direction is the future of sports gear and clothing. By attracting designers such as Yoji Yamamoto, Adidas has made inroads into previously inaccessible consumer pools.

In 2007, sport Style and sport Heritage merged into a single sport Style direction, however, the logos of the two directions are still present on the company's products.

1985

Advertising for Adidas tennis clothing in 1985.

1948: Business split into two firms Adidas and Puma

Over time, relations between the brothers deteriorated, and in 1948 they divided the firm. Adolf organized the company Adidas (the name is composed of the diminutive form of the name Adi and the first three letters of the surname), and Rudolph - the company Ruda, soon renamed Puma.

​​Adolf and Rudolph Dassler are siblings, founders of Puma and Adidas. They did not like each other so much that they did not communicate until the end of their lives.

1928: Olympians perform in Dassler shoes

At the 1928 Summer Olympics, several athletes competed in Dassler sports shoes.

1924: Founding of Gebrüder Dassler

Adolf Dassler was born into a poor family. Shoemaker by profession (after his father; mother was a laundress), shortly after the First World War, Adolf, with the help of his father, Christoph Dassler, who worked in a shoe factory, began to produce sports shoes. His partners were blacksmiths, the Celein brothers, who made spikes for the soles. In 1923, Adolf invited his older brother Rudolf to his company.

On July 1, 1924, Rudolf and Adolf officially opened the shoe company Gebrüder Dassler, which became very successful. Adolf dealt with production issues, and Rudolph dealt with sales issues.

Notes