Adidas is more successful than ever in the U.S., but CEO Kasper Rorsted says that the company’s list of North American challenges is ‘very long.’ PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES
WSJ’s Sara Germano delivers a very insightful discussion on how Adidas is making plans on growth. A few weeks back I wrote that Adidas’ growth was very fragile and that at any moment Nike could deliver a series of moves that would add up like a 10 hit combo on Mortal Kombat. The fact is Nike isn’t concentrating on taking back shares of the market from Adidas and Under Armour, Nike is focused on making itself the largest Direct to Consumer company in the world. A page that is discussed in this WSJ article in regard to the opening of the gigantic retail store recently opened in NYC.
Direct to Consumer sales are more difficult to track for research analyst and this is reflected in the stock prices of Nike this year. The 18% drop reflects the markets inability to understand what is happening with the brand. When people analyze DTC is often in regard to Avon or Fitness Companies like Herbalife and Tupperware. No sportswear company has really broken the mold and pushed so thoroughly towards hitting their market directly.
While Adidas is currently winning and showing considerable growth, doing so by expanding wholesale does not have the same profit/revenue growth as Nike’s push to DTC. This has to be a discussion that’s held each time the success of adidas is stated. Click the source link for more insight.