Why Adidas CEO Kasper Rorsted Isn’t Staying in Celebration Mode Too Long

Adidas CEO Kasper Rorsted
Adidas CEO Kasper Rorsted.
Courtesy of Adidas.

On the heels of a stellar 2016, Adidas is in a bullish frame of mind.

During the company’s investors’ day at its Herzogenaurach, Germany, headquarters on Tuesday, CEO Kasper Rorsted laid out an ambitious strategy for the firm’s U.S. growth. Specifically, Adidas’ chief said he expects to see the brand’s revenues climb nearly 50 percent over the next three-plus years to hit $5.3 billion by 2020.

Those results, Rorsted said, will hinge on the firm’s ability to engage athletes and “win in the locker room”; appropriately manage a robust product franchise; aggressively target key markets such as Los Angeles, New York, Atlanta and Chicago; land and sustain prime wholesale partnerships; and, most importantly, execute a second-to-none digital and omni-channel strategy.

“If we don’t get this right, we won’t be successful as a company long-term,” Rorsted said.

While acknowledging Adidas’ vigorous U.S. expansion — the brand’s revenues advanced 30 percent in the region in 2016, bolstered by an 80 percent gain in originals, 40 percent in running and 25 percent in U.S. sports — Rorsted came short of praising the short-term growth, highlighting that his focus is farsighted.

Adidas NMD Wool PackThe Adidas NMD “Wool Pack,” featuring gray- and black-based colorways. Courtesy of Footaction

“A high percentage rate is a reflection of what the starting position is,” the CEO said. “It’s easier to have a high-percentage growth when you have a low starting position.”

He added: “What we should not do is try to get a quick resolution to our situation in the U.S. … We’re not in a short-term race here; we’re in a long-term race.”

Rorsted — who joined the firm in October, replacing Herbert Hainer — said he’s looking to digital as the best way to accelerate the brand’s relationship with consumers.

In a CNBC interview today, Rorsted doubled down on his comments regarding a ramped-up digital focus: “It’s clear that the younger consumer engages with us predominately over the mobile device,” he said. “Digital engagement is key for us; you don’t see any TV advertising anymore.”

Adidas’ chief also said during the investors’ day that the brand will target more premium shelf space in U.S. retailers Foot Locker, The Finish Line and Dick’s Sporting Goods.