Toning will come again. That was the message from Reebok President Uli Becker at a press lunch hosted by Adidas CEO Herbert Hainer and his executive team Tuesday in New York.
Despite a tough year of high comparisons from 2010 and an industrywide oversaturation that led to “lower revenues and compressed margins” — and a $25 million settlement with the Federal Trade Commission over certain claims made in its EasyTone ads — Becker said Reebok isn’t counting out the category and will relaunch it in future seasons.
“Toning was driven by the insight that women care about their looks, and that insight doesn’t change,” Becker said.
In 2011, Reebok posted sales gains of 4 percent in North America despite the toning drag, and would have posted an increase of 24 percent excluding toning, the company said.
While Becker was mum on details, he did say that new product innovation, tighter distribution and a long-term plan would be key to reestablishing the category in the U.S.
He added that toning sales have been strong overseas, given that inventory challenges aren’t an issue there.
“There’s a lot of sustainability for that business,” he said. “[But] we need to do things better.”
During the lunch, Hainer also outlined the Adidas Group’s outlook for the coming year, which, he said, should build on a record-breaking 2011.
“We have never been in a better position than we are today, at least not since I’ve been here, and I’ve been here a long time,” Hainer said.
Sales year-to-date for the group are up in every market, he said, led by 28 percent growth on a currency-neutral basis in greater China, where sales are expected to hit 1 billion euros by year’s end). Sales for the European emerging markets have increased 23 percent, while North America has risen 14 percent.
The CEO did acknowledge that continued higher raw material costs and the economic turmoil in Europe could be factors in 2012.
“Every day is a roller coaster,” he said of the economic picture. “But we haven’t seen the risk to consumer spending yet.”
But even in the face of the big-picture headwinds, Hainer said he was bullish about the 2012 outlook: the Eurocup 2012 slated for June and the London 2012 Olympic games in July should provide revenue and brand-building opportunities, he said.