Jun 8, 2017
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Adidas optimistic new shoe models will drive U.S. recovery

Jun 8, 2017

Adidas is optimistic that strong demand for new shoe models will drive its recovery in the U.S. market even as the popularity of classics such as the Superstar and Stan Smith wane, the company's North America head told Reuters.

Once a laggard, Adidas has made a strong comeback, overtaking rivals such as Under Armour Inc and giving U.S. market leader Nike Inc a run for its money.

Adidas reported a 24 percent increase in sales in North America for last year. - REUTERS/Michaela Rehle

Adidas' retro Superstar shoes were the top selling sneakers in the United States last year and marked the first time a Nike product was not on top in more than a decade.

The German company nearly doubled its market share to 9 percent in the U.S. footwear market in the 12 months ended April 2017, according to research firm NPD.

Nike stayed well ahead, but its market share dipped to 50 percent from 52 percent.

Mark King, president of Adidas' North America business told Reuters that the company had got better at managing the rise and fall in demand for its most popular shoes and was being careful not to oversaturate the market.

"In the past we have shipped too many at times, and now we're very cautious about shipping the right quantity," King said, adding he was betting on the popularity of new models to offset softening demand of old ones.

"For many years, we had the same franchises that lasted for years and years. I think what we're really excited about is that we've introduced new franchises like NMD, Tubular, Ultraboost, Alphabounce," he said, referring to the company's new line of shoes.

Last year, Adidas' North America sales rose 24 percent to 3.41 billion euros (2.96 billion pounds), its best performance ever.

Some analysts, however, have questioned the sustainability of this rapid growth.

There are concerns that Adidas could be leaning too much on fickle fashion trends to drive growth in the United States, rather than on performance sports shoes, where it lags Nike by a wide margin.

King, however, said while he saw fast changing fashion trends as an opportunity, the company's focus was still on its core business: performance products for athletes such as football and baseball cleats, golf, soccer and basketball shoes.

To build out its sports business, Adidas has sponsored nearly 85 basketball stars, including James Harden, NBA's nominee for most valuable player in 2017, and roughly 200 NFL players and 200 baseball players, King said.

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