Adidas after 2015 may become more radical and open, but first of all to solve the conservative, slow response, product ugly and a series of direct impact on the number of earnings issues
If you think of the 1970s the streets of the United States young people are wearing three fake yeezys marked with three fake yeezys, Adidas now the situation is even more lonely. In 2014, Adidas lost to the North American market Under Armor, the first time fell to the third position. In the Chinese market, it is far less performance in recent years, New Balance eye-catching, in the brand appeal and the old rival Nike gap is also growing.
Annual stock fell 38%, single quarter of 140 million euros in huge losses, Adidas 2014 fiscal year report can be described as quite bad. “In 2014 we experienced ups and downs, and sales of all of our brands will grow in 2015.” After the annual report, CEO Herbert Hainer on March 26 Dayday activities, once again proposed an average annual revenue growth of 20% before 2020, the average annual net profit growth of 6% -9% target.
The 15-year old employee who worked for Adidas did not give a detailed plan of how to achieve this goal, but he might have been anxious. We see the latest Adidas breath launched 50 kinds of optional colors of the classic shell fake yeezys Superstar, Adidas will appear to become more radical and open.
Conservative, slow response, and the design is also Adidas has been criticized, but so far lost so much money, in the end because of what?
From the financial data to see how Adidas is going downhill
The fourth quarter of 2014, Adidas appeared a loss of up to 140 million euros – which is probably the equivalent of its headquarters, the German town of Heightsen Oulach residents in the past six months all the income.
This performance also dragged Adidas’s annual results: 490 million euros of net profit fell 37.7% year on year, even without considering goodwill write-down, also failed to reach 650 million euros of the annual target – if taken into account This goal is also lowered in mid-2014, it sounds even more serious.
Fortunately, the Group’s total revenue to maintain a weak upward trend, from 2013 to 14.03 billion euros rose to 14.434 billion euros in 2014, an increase of 2%. This is also a number of Adidas is more willing to discuss the number – benefit from the Brazil World Cup and the Champions League, in addition to the North American market, the company in 2014 the rest of the global regional markets have achieved sales growth.
But in the past 5 years, Adidas sales fluctuated, and did not have a beautiful growth curve. Profits are also declining as a whole: € 564 million in 2014, down from € 568 million in 2010.
Other sports brand is not the case
On Feb. 20, Nike also reported third-quarter results for fiscal year 2015: quarterly earnings rose 17% to 89 cents a share, with sales up 7% to $ 7.5 billion. CEO Mark Parker is still such a strong growth attributed to product innovation for the global trend of sports apparel and footwear lead.
Affected by this news, in the day before the release of earnings, Nike shares rose 4.8%, and even pulled its own S & P 500 index. Previously, Nike shares in November 28, 2014 hit a high of $ 99.76. If we compare Nike’s price chart with Adidas, we can see that the two companies have maintained a basically consistent growth trend, but after 2014, the share price gap is getting bigger and bigger.
In the North American market, has been raised is another fast growing brand Under Armor. After 18 consecutive months of revenue growth of more than 20%, it finally in the second half of 2014 beyond the Adidas, the US market has become the second largest sports brand. In 2014, Under Armor’s total revenue exceeded $ 3 billion, in the stock market, the brand also maintained twice the price increase in Nike.
And in the base camp in Adidas European market, occasionally will be used to compare the sports brand Puma (Puma) situation, but also from its parent company Kai Yun Group’s earnings in a glimpse of: 2014, Kai Yun Group total income Breaking 10 billion euros, of which Puma contributed 2.99 billion euros.
We have to look at the past: the past three years, Nike maintained an average profit margin of 10.07%, Under Armor 6.76%, Adidas only 4.26%, year on year sales growth rate, Adi’s performance is also no good where go with.
Adidas may encounter any problems?
Although to retain the world’s second brand status, but Adidas this company problems, may no longer be able to return to the golden age of the 1980s. In recent years, it has encountered a series of problems in the global market, perhaps from the German companies in the North American market, those strategic mistakes:
Marketing: Although it is also aware of the importance of the female market, but in general, Adidas is still the focus will be on the product presentation and sales channels of traditional companies, and Nike, Under Armor have been more and more emphasis on life Way brand attributes, and consumers to establish a closer and sustained interaction, such as Nike + caused by running fashion, Under Armor according to their professional emphasis on high-end sports experience.
Technology development: Adidas basically maintained with Nike and other brands almost the same technology new product development frequency, but in the key technologies such as Boost’s selling, it is far less than Nike introduced to consumers Flyknit as hard;
Player Sponsorship: Due to the field of deep plowing football for many years, Adidas know how to sponsor the most popular, most fans of the European team, and get some success. But it did not bring this shrewd to international races and athletes to sponsor, so the direct loss of a large number of potential consumers;
Shop design: Adidas has learned for the different types of customers and different preferences, to create the form of retail stores, compared to the previous brand rather than category breakdown of the model, which is a big step forward;
Trends grasp: from the earnings point of view, Adidas has begun to focus on the part of its emphasis on fashion, the design of several sub-brands, but far from the fashion trend of the overall layout of the United States, is still a disadvantage.
China’s stock market problems, Adidas is the focus of consideration?
Compared to the poor performance of the North American market, Adidas in the same highly competitive Greater China performed well: 2014, Adidas Greater China annual sales reached 1.811 billion euros (about 12.247 billion yuan), an increase of 10 %. This is also its Greater China since fiscal year 2010, the fifth consecutive year sales growth, the total increase of about 80%.
After the Beijing Olympic Games has been raised from the inventory problem, it seems no longer exist. At that time, Adidas to get the right to sponsor, invested 80 million to 100 million US dollars in costs, while creating a large number of theme products. But after the Olympic Games, unusually serious inventory problems make the company cash flow pressure, when the backlog of goods in the Adidas warehouse goods even up to billions of dollars. This decline has continued to 2010, and in 2009 closed more than 200 stores.
Ultimately to save Adidas Greater China performance, is a “2015” to the reform plan: through cooperation with the dealer, the user habits to track, and ultimately improve the order quantity and product sold out rate; the store planning to re-division , Pay more attention to the vast four to seven lines of the city market; relatively saturated in the market a second-tier cities, investment design sense of a stronger, more profitable sub-category stores.
But gradually rebound in sales, Adidas did not get the brand influence of the simultaneous growth. A comparative example is New Balance: With running as a new trend in the city, New Balance’s running fake yeezys have become a trendy single product for young Chinese consumers. From 2012 to 2014, New Balance in mainland China, the number of stores increased from 301 to more than 1,600, sales also reached two years in the three-digit growth by leaps and bounds, and even the same in the running fake yeezys The field of hard work for a few years Nike formed a threat.
As for the idea of sponsoring large international events in the end Adidas (and always scratch the ball of Nike) have had any effect, we may wish to look at the relatively close to the London Olympics and the Brazil World Cup:
Sportswear and fake yeezys this thing, do not grasp the young people also say what the future
Whether Adidas or Nike, they all understand the importance of grasping the young people. The difference is that Adidas is still using the traditional method: looking for cool look spokesperson, or with the designer to launch a joint brand, to show the brand characteristics. And Yamamoto Yao Division, Stella McCartney co-launch co-brand, or choose non-athletes such as Eason Chan as a spokesperson, these practices in the Chinese market was very useful: it makes young consumers think, without three bars Adidas can also be counted as fashion , While the past three years, Greater China’s income growth is also largely from its clover, NEO and other sub-brand selling.
Nike’s thinking is more streamlining: by changing the way young people’s life, to influence their consumer behavior. Such as the sponsorship of marathons in China, the organization of people to participate in night running, to encourage people to record data through NIKE Running, and let your friends with the appropriate App in the running of your cheer.
But the more central issue is that Adidas has little new products for the new market – even if there is, leaving the impression of the market is not clear. Rely on the spokesperson, the market convincingly much smaller.
Look at the face of the times, you ugly really can not go
In the self-timer and social media so strong now, will be nice things to share to others become one of the most natural social behavior. However, the design of their own products, Adidas fake yeezys marketing director Eric Li Teke had a carved and accurate evaluation: “Adidas to high quality and durable brand reputation, but not charming.”
He mentioned that when the customer was given feedback on the product, the company’s staff had asked some children: “If someone wear Adidas to attend the party, where will they come and go?” The children gave the answer is very exciting: wearing Adidas fake yeezys boy will be mixed in the boy heap together to talk about girls, but wearing Nike fake yeezys are boys and girls together.
Compared to the product to design more and more dazzling colors, Adidas seems to be more willing to spend a lot of research on technology upgrades, such as upgrading their own high-tech running fake yeezys technology Boost, or the development of various types of sports data can be measured Wear sensor miCoach. And Nike’s technology is very “dominant”, such as directly reflected in the upper Flyknit, not only a new “technology”, is also a new design element. Shox technology early support column, or Air Max’s deliberately exposed a large area, is the same reason.
Adidas has also tried to change, such as the investor relationship after the launch of the 50-color fake yeezys. (But most of the users involved in the comment, unless the one-time to buy these 50 colors, otherwise they will die to choose difficult patients) to change their own products and design style, the most direct way is to dig the Nike designer The In September 2014, three Nike designers collective job-hopping Adidas, and triggered a lawsuit dispute.
Nike said in the indictment that the three designers have mastered the Nike in the next few weeks will launch all the design, materials and clothing concepts, as well as the sponsorship of the athletes and confidential financial information, Adidas will be expected in their own Factory copy of the future of Nike to do all the products.
Fashion or to seize the trend, the trend to select people
Adidas has also realized that far from the United States this trend to the development of the company will have much impact. After the 47-year-old American Eric Liedtke served as head of the global brand, some executives went to the office in Portland, including Paul Gaudio, the company’s global creative director. The future, more for the US market Adidas products will be put here to develop. (By the way, Portland is also headquartered by Nike.)
“The US market can reflect what kind of cool things in the popular, integration of sports and lifestyle, popular sports products, and is popular to Europe.” Former Adidas executives, the current Puma CEO Bjorn Gulden said The
“Wall Street Journal,” a recent report that in the 1970s, Adidas in the US market is far better than today’s Nike, the streets of young people are wearing fake yeezys with three bars logo. But in 1984, Adidas committed a seemingly fatal mistake: because of height problems, refused to sign the then still studying at the University of North Carolina, Michael Jordan.
Jordan will soon choose to sign Nike, while the latter is relying on his performance on the pitch, the product line more and more expansion, and ultimately in the 1990s to establish the company’s market position. In 2005, Adidas in the North American sports fake yeezys market share fell to about 10%, while Nike has risen to 35%.
Nike and Adidas in the field of basketball influence, but also from the number and quality of its contract players to see out: According to Business Insider statistics, currently signed with Adidas NBA star 70 people, to among the ranks of the top players rarely; Nike’s NBA star signed 283, the top players up to a dozen.
Under the trend, Adidas and Nike each created what “explosive” products
Basketball and running, but also Nike in recent years to produce “burst” the two most areas: NBA basketball players named Jordan, Kobe Bryant, James three product line enduring; and running field is Free, Air, Lunar, Vimeo And Flyknit and other sports technology test field, almost every product launch with marketing activities, can get consumers of all ages.
According to Adidas in the 2014 earnings report