How do you measure a comeback?
Is it the level of hype surrounding every new product release? Is it in the number of high-profile celebrities and athletes spotted in the product? Perhaps the answer comes from the sheer volume of sales the brand reports and, ultimately, its bottom line.
For Adidas, authenticating its North American revival isn’t tied to a single metric — over the past 18 months, the Germany-based brand has been able to check off every single box.
Defined by hysteria-inducing Yeezy releases, popular and newly revamped Classics, buzzy new product lines (NMD, Boost) and countless celebrity sightings, Adidas is on an unprecedented run.
The icing on the cake? The brand’s second-quarter earnings results, released on Thursday, show that both its top and bottom lines are flourishing, with revenues soaring over 30 percent in what had been its most challenging market, North America.
Watch on FN
Adidas’ resurgence may seem like an overnight phenomenon to some, but Mark King, president of Adidas Group North America, said the momentum is a result of strategic and targeted efforts.
“[We realized] that the strategies we had been employing in [North] America up until a couple years ago weren’t breaking through. We needed to change everything,” King told Footwear News in an exclusive on Thursday. “We looked at, ‘Are we investing enough in America? Are we resonating with American consumers?’ And we didn’t like a lot of the answers, so we changed a lot of things.”
Here, King is candid about Kanye West and James Harden’s contributions to the brand, how the company revamped its approach to the American market and what’s next.
What has Adidas done differently in North America over the past 18 months?
MK: “We moved a lot of resources from Germany to Portland [Ore.] so we would have people like the creative director of the company and the brand director — people who were making decisions on messaging, advertising, social media — in the marketplace. There was a shift in resources to the U.S. to be closer to the consumer. We’ve signed a lot of athletes — Aaron Rodgers, James Harden, Sidney Crosbey, Carlos Correa — across all of the major sports in America, which we hadn’t been doing. Most importantly, most of our products are designed here in the U.S. for U.S. consumers, so I think the style and colors and aesthetics of the footwear and apparel are resonating more.”
Adidas has talked a lot about newness and fostering creativity recently. In what ways is Adidas disrupting the status quo?
MK: “We have positioned the brand as a [place] for creators. The young athlete today in high school and college wants to be different and stand out and cut through. So when you sign people like James Harden, it resonates. James is a unique individual on and off the court. He has this spirit and persona, and he is a really great player. We’re trying to tell that story. Also, the speed at which we’re launching product — on key franchises like the Superstar and the Stan Smith — is much faster. We’re also creating new franchises, such as Yeezy, NMD and Tubular.”
What role has Kanye West and his critically acclaimed Yeezy sneaker played in the unprecedented excitement around Adidas in North America right now?
MK: “He’s brought the idea that the Adidas brand is willing to create new and different things. The association with Kanye West and how he sees himself as an artist — with design, music and culture — said ‘this Adidas brand is not just a typical sports brand. It’s one that looks at creativity and considers both sports and culture.’ And his influence runs deeper than that — to products he really has no connection with, such as the NMD. He has opened our eyes [to the fact that] it’s a big world out there and we should be looking at it in many different ways.”
Is there pressure to follow up on each of his buzzy Yeezy releases?
MK: “I don’t think it’s pressure — it’s excitement. We’ve found a personality and an artist who resonates with this young consumer today. The exciting thing is where and how far can we take this. Today, it has been two shoes that have come out in different colors and fabrications, but we’re looking at how far we can take it into styles and whether it crosses over into performance and [so on]. There’s a whole world out in front of us with Kanye West — we just redid his contract. We created a business unit around him to look at how he can touch sport and culture. We’re just getting started.”
How has Adidas’ collaboration with Pharrell Williams generated excitement and growth?
MK: “Pharrell brought the opportunity around color. When we launched 50 different colors, it opened people’s eyes to the many ways we can express styles and touch consumers. As a company, we’ve changed our mindset, and these collaborators helped us open up and see the world through a different lens.”
What are your thoughts as the company prepares for CEO Herbert Hainer’s retirement this year?
(Editor’s note: Kasper Rorsted was named to Adidas’ executive board effective Aug. 1, 2016, and on Oct. 1, 2016, he will become CEO.)
MK: “I’ve worked for Adidas for many years, and I’m a big fan of Mr. Hainer’s. I’m excited that as he retires, he goes out with a lot of momentum — he deserves it. The new CEO is going to bring a new perspective with his experience and wisdom. What we hear so far — he just started on Monday — is that things are great and everyone likes him. He’ll be headed to America in 10 days, and I’ll show him around the U.S. We’re excited because Mr. Hainer goes out on top, and we have a new person coming in with a lot of momentum.”
With all of the ramped-up growth the company has seen lately, is it safe to say Adidas is coming for Nike’s No. 1 spot?
MK: “It’s an aspiration. Great companies think big. Our goal is to be the best sports brand in the world. That’s why we come to work every day — if you don’t have that big aspiration, your behavior and your risk-taking are limited. We’re not limited by our competition — we’re only limited by our ability to create new and cool things.”