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Jun 24, 2015
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Adidas to grow football sales by getting back to roots

By
Reuters
Published
Jun 24, 2015

German sportswear firm Adidas laid out plans on Wednesday to defend its position as the world's top football brand against fierce competition from Nike by launching a new range of footwear and setting up more grassroots programmes.

Adidas said it aims to increase football kit sales, including shoes, at a mid-single-digit rate annually on average from 2015 to 2020 on a currency-neutral basis, but that was lower than the "high-single-digit" growth rate it set for group sales in March and reflects the challenges it faces from U.S. rival Nike.

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The two companies dominate a football kit industry worth more than $5 billion a year, sharing more than 80 percent of the market for many products, but Nike has been threatening Adidas' leadership, including in its home territory of western Europe.

Adidas, which saw the 2014 World Cup help boost its football sales by more than 20 percent to 2.1 billion euros ($2.35 billion), said it would do more to connect with a broader range of players by setting up permanent or temporary grassroots programmes.

"Football still starts on the street. This is where the kids get in touch with the sport," Adidas football head Markus Baumann told analysts, noting that 226 million unregistered football players worldwide dwarfed the 30 million registered.

Baumann said Adidas would focus on the top three football leagues in the world - in England, Germany and Spain - as well as the top 25 clubs.

Adidas last year struck a record shirt deal with former British champions Manchester United ousting Nike. It will also replace Nike at Italian champions Juventus this summer and has extended an outfitting deal with Bundesliga champions Bayern Munich. The U.S. company, however, has struck deals with many other top clubs and players.

Adidas has faced calls to end its support for FIFA due to the corruption scandal engulfing football's world governing body, but Baumann said the company has no intention of changing its contracts with FIFA and European football governing body UEFA in the next couple of years, noting that both are long-term contracts.

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However, Baumann said when contracts come up for renegotiation, Adidas would consider how influential this kind of partnership is to its target consumer.
It is focusing on boosting sales of footwear rather than kit, and this month scrapped its four established football shoe brands and launched two new ones, the "X" and "ACE".

Baumann said marketing of the new shoes, which respond to a new footballing philosophy which divides players into those specialising in control and those who bring unpredictability and speed to the game, had already reached 40 million consumers.

Adidas also set a target to double currency-neutral sales from its running business from 2015 to 2020 by connecting with local communities of runners and focusing on the North American market, where it hopes for significant market share gains.

In addition, it hopes to increase sales from its sports-inspired fashion brand Originals by 50 percent by 2020.

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