During an investor event in Germany on June 24, Adidas Group unveiled its ambitious five-year plan to accelerate growth in three categories: Football, Running and Originals. By assigning “a clear role and specific goals” to each category, the firm said it aims to achieve significant improvement in its top and bottom lines.
Adidas says it expects to see its Football and Originals categories “lead in every market” by 2020, while Running is targeting greater market share.
Here are the takeaways from the meeting.
Focusing predominantly the shoe part of its football business, from 2015 to 2020, Adidas anticipates growth at a mid-single-digit rate (on average per year on a currency-neutral basis).
The firm said its plan will be supported by a completely new product lineup, as reflected in its recently introduced footwear franchises X and ACE.
Adidas also said it will “create football destinations in key cities” in order to connect with both registered and unregistered players.
“Since the beginning of this year, we have reinvented our football business by discontinuing our former football boot silos, and brought two completely new footwear models to market to better serve the needs of today’s players: X and ACE,” said Markus Baumann, GM for Adidas Football, in a release. “We are convinced that this new approach will strengthen our position in football footwear.”
Adidas plans to focus much of its efforts in the running category on the North American market, where the firm is aiming for “significant market-share gains over the next five years.”
A major driver of this growth, Adidas contends, will be “the establishment of two creation hubs” for the category. In addition to Boston, run bases will be established in both Los Angeles and New York City for runners and their communities, the firm said.
Adidas Running expects its currency-neutral sales to double by 2020.
“We will focus our activities on key running cities representing the largest running communities globally. We will also continue to open-source our running business with partners such as BASF, key athletes and running communities around the globe to ensure that we continue to create consumer-focused product. Additionally, we have an exciting consumer proposition in the pipeline looking into speeding up and redefining the manufacturing of footwear,” said Adrian Leek, GM of Adidas Running, in a release.
The firm said it expects currency-neutral sales for Adidas Originals to increase by 50 percent by 2020. The sub-brand is expected to drive the business by focusing on lifecycle management of a limited number of global footwear franchises, including the Stan Smith, Superstar, ZX FLUX and Tubular.
By 2018, the major product families are expected to generate the majority of the overall Adidas Originals footwear revenues.
Adidas also plans to open new flagship stores in more than 30 global cities to showcase its Originals, and hinted at supply-chain changes by noting its intent to offer increased speed to market.
“The hype we have recently created around our iconic Stan Smith and Superstar silhouettes is just the beginning,” said Arthur Hoeld, GM for Adidas Originals, in a release. “With our well-filled product pipeline as well as some of the world’s most influential artists, such as Kanye West, Pharrell Williams and Rita Ora collaborating with us, telling our stories and promoting our products, we will be closer to our sports-lifestyle consumers than ever before.”
For more on Adidas’ growth strategy, check out what the firm said at its most recent investor meeting by clicking here.