Global Biz

Adidas eyes Olympics to take Nike's UK crown

(Agencies)
Updated: 2011-05-30 10:36

LONDON?- German sportswear maker Adidas?plans to use the Olympic Games in London next year to generate 100 million pounds ($165 million) of sales in the UK and steal market leadership there from arch rival Nike. ?"We want to achieve market leadership in the UK by 2015 at the latest. The Olympics is definitely a pillar for that," Chief Executive Herbert Hainer told journalists in London.

Currently Nike, the world's largest sportswear group, has a share of about 18 percent of the UK sports apparel market, worth an estimated 4.3 billion pounds, with Adidas in second place on about 15 percent.

Adidas is kitting out the host nation's athletes with gear designed by Stella McCartney and also making the official London 2012 sports apparel merchandise for sale in the UK, which will not feature the group's three-stripes logo.

As official sportswear partner, Adidas will also provide clothing for the athletes to wear in the Olympic village and for volunteers.

Adidas, whose founder Adi Dassler provided running shoes for athletes during the 1928 Games, said the London 2012 products had already been selling well in tourist stores.

The group added it was currently negotiating rights to sell 2012 merchandise in its other key European markets of France and Germany, with sales expected to start in France at the beginning of next year.

Hainer said the cost of buying licence rights and marketing would also reach about 100 million pounds, the same as the projected sales uplift in the UK.

"Of course, if Team GB does better than expected, there would be upside potential," Hainer added.

After the Beijing Olympics left the group with excess products that it then had to sell at discounts, Hainer said the group had streamlined production processes and could adjust production rates at short notice, depending on demand.

Adidas is currently enjoying a boom in demand for its products, from basketball gear to soccer shoes, and earlier this month raised its sales targets for the second time this year, despite the loss of business from key market Japan.

Hainer said in London that the overall situation in Japan after the earthquake and tsunami was looking better but did not adjust his estimates for sales there.

He had said earlier in May that the group was working with the assumption sales in Japan would fall by 15-25 percent as a result of shops being closed following the earthquake and tsunami.