A selloff in Adidas AG’s stock has propelled rival Nike Inc. back into the lead.
Real quick, let me pull this Kanye… AHN already said this would happen so analysts who are now making Nike a buy and pulling back on adidas weren’t paying attention.
That’s it for my gloating which isn’t gloating because what does this really mean? Nothing and everything… I should really stop listening to Kanye. Seriously here are a couple of articles for you to rewind and understand where I saw this going; in March I wrote this:
In this long post I deliver several reasons why adidas can sustain, but I also bring a few points that explain why the brand is on shaky ground. I also said this, “Nike may figure things out and do something creative and fresh beyond ZoomX and Vapor which aren’t as good as they are hoping.” That thing Nike figured out was years in the making and clarified on Investor’s Day. The Consumer Direct Offense has been vital in the trust in Nike by shareholders.
adidas had other issues as well which I addressed here:
adidas’ momentum was built on low end footwear. The brand made a move based on classics like the Stan Smith and Superstar. They reinforced those moves with NMD and UltraBOOST. Both of these shoes when they released were at the low end of the premium price spectrum. NMD was a 110-130 dollar shoe and UB was 130-150. As adidas gained a larger share of the market their prices increased NMD 180 and UB 220 in some instances. This led to adidas no longer selling through footwear although they had gained the front of store in major retail outlets. I said this in the article above, “The brand is going to have to realize that playing in the elevated premium price area is not what pushed them forward in the last year. A return to form is needed or the brand will definitely see the bubble burst.”
My discussion led to a mall visit by my partner Tayib of Housakicks.com and he delivered this mindblowing story on adidas succumbing to the promotional environment that has hinder the entire footwear industry:
While analysts and sites like Bloomberg are reporting that Nike is gaining shareholder faith and adidas is falling, what they aren’t doing is giving you a detailed history and reason for why this has happened. Take your time and browse through the videos and information on the site. Every article above will take you to another article and you can build your own idea of whether adidas will bounce back from this current drop in share price.
If you ask me adidas has become a victim of design and I wrote this recently because I feel that the brand is missing on marketing which has been a big reason for their success and now they are missing on design and creating too many shoes that are similar. Ultimately, $ADDYY grew from 74/share in February of 2017 and now sits at 101 after a high of 118.98/share. Take everything I’m saying with a grain of salt. I’m not an analyst. This information is meant to inform, not meant as advice.
You can use the source link at the top to read the Bloomberg post.