Adidas is about to launch new fashion sneakers that will help the brand establish a name in retro fashion. The new sneakers will give the German shoemaker the desired growth and will also help attract more sports fans. Adidas announced on Monday that Henkel’s Kasper Rorsted will take over as the new chief executive in October. The decision comes after Adidas realizing that it lost its major market share to Nike. Arthur Hoeld, head of Adidas Originals, said that the fashion business helps win fans on the field. Adidas has been associated with celebrities like Kanye West, Pharrell Williams, and Rita Ora.
Adidas wants to focus on sport goods, too
“We will capture more of the growth of the sneaker industry with our performance products, but Originals will help us to grow a more significant share. We’re not concerned here internally about the balance,” said Arthur. Nike has been winning over Adidas in terms of launching sportswear with new features and has been closely associated with sports figures than celebrities. Adidas has also seen growth; it just hasn’t been as good as Nike. The fashion brand has been famous for its originals and NEO shoes and accounts for 30 percent of sales in 2014 to 70 percent for sports performance products.
Berenberg analyst Zuzanna Pusz says, “Originals is a great franchise. I just think Adidas should avoid being seen as a fashion brand. In the United States, a lot of people know Adidas is a soccer brand but don’t associate it with other sports.” Adidas is also expecting strong demand for running shoes and soccer gear, as European soccer championships and the Rio Olympics are just around the corner. Fashion Sneakers are a must these days, as they command higher margins for the company. Fashion sneakers are easier to manufacture than performance shoes and have a huge demand. Puma saw a major slide in its shares once it became a fashion brand. It was after Bjorn Gulden took over as the chief executive that the company started to rebuild its sports credentials by sponsoring teams like Arsenal.
The company plans big after the executive change
However, Hoeld declined to comment on what strategy Rorsted might adopt for Originals when he takes over. But investors can still hope that he will boost profits by cutting costs and driving innovation. Adidas failed to achieve the same brand appeal as Nike “Free” with its latest innovation called “Boost,” which was initially pitched to serious runners rather than fashionistas. Adidas has included “Boost” soles on the sellout “Yeezy” shoes designed by Kanye West
Hoeld has high hopes that the retro trend won’t go away soon and the company can cash on it majorly. “We’re on to the next big one here. Demand is still very strong and growing for those franchises. The number of high-end fashion brands that are copying our silhouettes right now is unheard of,” said Hoeld, citing social media buzz around the shoes as well as retail demand. Hoeld intends to keep them on a major desired level but in no way wants to overexpose it. The company has also decided that it won’t flood the market with Stan Smiths and Superstars.
Be the first to comment on "Adidas seeks growth with fashion-style sneakers"