Adidas returns to ranks of sports shoe contenders
BULLS OF THE WEEK
Modern day sport has served as a battleground for some of the biggest marketing wars on the planet. It has been the backdrop for the battle of the soft drinks (Pepsi vs. Coke) and the battle of beer (most recently Molson Coors vs. Anheuser-Busch Budweiser). Yet there has been no more intense competition in the business of sport in recent years than the battle of the sports shoe and all of the apparel and gear that comes with it.
That’s why the reported North American revenues for the three leading sport shoe companies created such a buzz this week, with Adidas continuing a huge swing that has seen it fend off relative newcomer UnderArmour and even close the gap with the undisputed continental and global champion Nike. As ESPN sport business reporter Darren Rovell reported this week, Adidas quarterly revenues hit $1.04 billion (all figures in U.S. dollars) for the last quarter, a gain of 21 per cent. UnderArmour fell slightly to $867 million, a drop of one per cent, while Nike stalled at $3.78 billion, a fall of six per cent. It’s a remarkable result for the German brand founded by Adi Dassler as the “Dassler Brothers Shoe Factory” in 1924.
Until the bleeding stopped in 2015, Adidas was in free fall for years, not only losing big time against Nike but falling behind UnderArmour and even Skechers, along with the Nike extension Air Jordan. The reasons for the Adidas comeback? The edgy Kanye West line has been big — although that may get uncomfortable over the long haul — as has Ultra Boost, but don’t dismiss the retro appeal of Adidas originals and classics.
Nike still holds a commanding 3-to-1 lead in North American market share, controls the NFL and is back as official jersey in the NBA. It is also the global leader with close to 30 per cent of market share (almost twice that of Adidas, four times Puma and about five times Reebok and New Balance).
Yet Adidas must love the fact that its strong run should benefit further this spring and summer on the strength of its global sponsorship of the FIFA 2018 World Cup, its biggest worldwide marketing investment.
BEARS OF THE WEEK
The Toronto Raptors epitomize the ups and downs of the sport-business landscape, which often work much like the stock market. One day you’re up. The next day you’re down.
The Raptors were up for much of the past seven months: A franchise record 59-win regular season; the top seed in the Eastern Conference for the first time in their 22-year history; and a strong finish to their six-game series win over the Washington Wizards.
Yet for some reason, LeBron James is to the Raptors what garlic and sunlight are to vampires. Hence their reputational stock plummeted this week after two crushing home games: An unfathomable loss in a game in which they never trailed until overtime, followed by an inexcusable second-half collapse in a Game 2 Cavaliers rout.
Squandering the home court advantage they so coveted for a matchup against Cleveland, the Raptors need divine intervention to win four of five against James and the new-look Cavs. And that means no one will remember their fantastic regular season.