Exclusive: Adidas CEO Kasper Rørsted Says High-End Brands Are No Threat to the Athletic Sneaker Market

Everyone is trying to claim their stake in the thriving sneaker marketplace right now. But according to Adidas CEO Kasper Rørsted, there’s only one retail category that poses a threat to the athletic giants.

And its not high fashion.

“The high end and luxury brands are a minuscule part of the market. Take Gucci or Versace or something like that, their market share — and I mean this respectfully — is so small it’s irrelevant,” Rørsted said in an exclusive sit down with FN today.

The luxury category’s power players, such as Balenciaga, have made inroads with sneaker fanatics as of late, most notably with the buzzy Triple S chunky sneaker. The style was a high-end response to the dad shoe trend, sparked by styles including the Nike Air Monarch IV.

balenciaga triple s sneakers fall 2018
Balenciaga Triple S
CREDIT: Nordstrom

But according to Rørsted, what separates now — and will continue to separate — the athletic standouts from the high-end labels is the ability to pair comfort and aesthetics.

“People want to have a cool running shoe that has functionality, but looks like a cool shoe. [They] want to have [a shoe] where functionality has a higher rate than design, but that doesn’t mean you can compromise on design,” Rørsted said. “A lot of people will wear an athletic shoe when they go out, but it has to be good looking.”

And what will also further the divide between the athletic brands from high-end ones, Rørsted explained, is technology.

“The short term change in footwear will be technology driven. The cost of 3-D print, which two years ago was unaffordable, will in two years time be affordable because the technology curve is so rapidly taking that price point down,” the exec said. “And the more the price point comes down, the more technology will come in. [Soon], you’ll have our Fifth Avenue store with 3-D printers — that will change much quicker than people think. That’s going to attack the luxury brands.”

Adidas is one of the athletic market’s leaders in sneaker tech, most notably with the unveiling of its Futurecraft 4D styles in April 2017, an innovation the brand dubbed the first high performance footwear that boasts midsoles made with light and oxygen.

Adidas Futurecraft 4D
Adidas Futurecraft 4D sneakers.
CREDIT: Peter Verry

The greatest impact on the sneaker marketplace, the athletic giant’s exec said, will come from fast fashion companies.

“Where you’re seeing a much bigger impact on transforming the market are the Zaras of the world — fast fashion, very fast product life cycles,” Rørsted explained. “They’re setting a trend that the sporting goods industry will have to follow. It’s naïve to believe that the supply chain we’ve known in the sporting goods industry will not come under attack, which is why [Adidas] creates speed programs or replenishment programs with in-season creations.”

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