Glazers To Sell 8 Million ManU Shares DGV Interested In Hosting '22 Ryder Cup Official Calls For Disbandment Of NLB Argentine FA President Grondona Dies Tokyo Governor Defends Venue Relocation WME-IMG Hires Chris Liddell As New CFO ARD, ZDF Considering TdF Comeback ONE World Sports To Air CHL In The U.S. Odey Rejects BSkyB Offer For German Sky Executive Transactions
SBD Global/May 6, 2013/FinancePrint All
Germany's adidas posted its highest-ever gross profit margin "as the sale of higher-priced products through its own stores and a new running shoe helped offset weak consumer spending in Europe and problems at Reebok," according to Victoria Bryan of REUTERS. Despite a 2% fall in sales in the first quarter, "with fewer big sporting events than the year before," operating profit at the world's second-largest sports apparel maker behind Nike rose by a greater-than-expected 8% to €442M ($578M). The group said that its new Boost running shoes, priced at around $150 a pair, "had almost completely sold out in several countries in the first four weeks of sales and that it was struggling to keep up with demand." Adidas CEO Herbert Hainer told analysts on Friday, "Unfortunately we don't have enough supply at the moment." Adidas shares jumped 7.5% to a record high of €85.63 ($112.25) after it said its gross profit margin had widened 2.4% points to 50.1%, "the second time it has ever reported a figure above" 50%. The higher profits overshadowed a slight cut in the sales growth forecast for its Reebok-CCM division, "which combines shoe, clothing and fitness brand Reebok and hockey brand CCM." The group now estimates that the business "will see sales grow" by less than 10% in '13 (REUTERS, 5/3). DEUTSCHE WELLE reported adidas said demand in Eastern Europe, Asia and North America had been especially strong in the first quarter, "making up for weaker markets in Western Europe." Moreover, adidas's newest "TaylorMade" golf equipment series "grew at a double-digit rate between January and March" (DEUTSCHE WELLE, 5/3).
Adidas insisted that "it had done nothing wrong and was 'clean' after an internal investigation into claims that a top official at Bayern Munich, Germany’s wealthiest football club, was lent millions of euros" by the sports goods maker's former CEO, according to James Wilson of the FINANCIAL TIMES. Former CEO Robert Louis-Dreyfus lent the money to Bayern President Uli Hoeneß, then GM at the club, in '01, according to a media interview given by Hoeneß himself, who "is being investigated for alleged tax evasion over a Swiss bank account." Adidas CEO Herbert Hainer said his company had investigated and was "absolutely clean from a compliance standpoint." Hainer, who officially took over from Louis-Dreyfus in '01, said that "he had not known about the loan" to Hoeneß, while Louis-Dreyfus "had not been personally involved in negotiations between adidas and the football club." Louis-Dreyfus died in '09. Hoeneß is now chair of the football club’s supervisory board, which "is due to meet on Monday and is likely to discuss whether he should remain." Hainer and other German business leaders including Volkswagen CEO Martin Winterkorn "are also on Bayern’s board." Hainer said that "adidas would remain invested in Bayern Munich" (FT, 5/3).
Equity firm Forstmann Little & Co. is working with Morgan Stanley and Evercore Partners Inc. "to find a buyer" for talent agency IMG Worldwide Inc., according to Saitto, Soshnick & Fixmer of BLOOMBERG. Two people, who asked not to be named because the process is private, said that the business could fetch $2B. Non-disclosure agreements “will probably go out to suitors in a couple of weeks, with first-round bids likely due in July," said another person. A representative at Morgan Stanley declined to comment. Representatives at Forstmann Little and Evercore did not immediately return calls seeking comment. Inner Circle Sports’ Rob Tilliss said that “possible suitors may include Guggenheim Partners,” owner of the MLB L.A. Dodgers; Silver Lake Management LLC, which has a stake in William Morris Endeavor Entertainment LLC; and Creative Artists Agency, which is part owned by private-equity firm TPG Capital (BLOOMBERG, 5/2).