Adidas counts on Rio to bring home gold
GERMAN sports gear maker Adidas is looking to the Rio Olympics to take its sponsorship baton in a year when big sporting events have already boosted business.
Sales at the group's core brand leapt 25 percent in the second quarter thanks to events including the Euro 2016 football tournament.
Higher sales of items branded with the Bavarian firm's famous three stripes were “mostly due to two-digit increases in the important categories of running, football and training, as well as Adidas Originals and Adidas neo,” two fashion branches, the firm said.
The Olympic games would be a “broad window” for Adidas to show off its different brands and technologies, chief executive Herbert Hainer said from Rio in a conference call last week.
“We now expect to be able to compensate almost all of the severe headwinds we will be facing this year,” including unfavourable exchange rates and high labour and materials costs, Mr Hainer said.
Following the boost from Euro 2016, Adidas-sponsored athletes and teams will be in the spotlight again at the Rio Olympics.
Adidas saw double-digit sales growth in several global markets in the second quarter, with a 32pc gain in north America and 30pc each in western Europe and China.
Sales grew more slowly in Russia and the Commonwealth of Independent States at just 5pc – slightly allaying fears of a blow to the brand from Russia's economic slowdown.
Across the whole group, revenues soared between April and June by 13p to 4.4 billion euros (US$4.9 billion), Adidas reported in preliminary results released at the end of July.
Adidas doubled its net profits over the same period in 2015 to 291 million euros.
The strong result in the second quarter was partly down to Adidas agreeing to end its sponsorship of London club Chelsea early in summer 2017, bringing in an estimated 50 to 100 million euros. –