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Marketing and Sponsorship

Adidas To Continue FIFA Sponsorship Deal, Looks To Grassroots For Sales

Adidas, which has "faced calls to end its support for FIFA due to the corruption scandal engulfing football's world governing body," said on Wednesday that it had no immediate plans to end its sponsorship deal, according to Emma Thomasson of REUTERS. Adidas GM of Global Football Markus Baumann said that the sportswear brand has "no intention to change its deals" with FIFA and UEFA in the next couple of years, noting that both are long-term contracts. Baumann said that when contracts come up for renegotiation, adidas would "consider how influential this kind of partnership is to its target consumer" (REUTERS, 6/24).

BACK TO BASICS: In a separate piece, Thomasson reported adidas presented plans on Wednesday to "defend its position" as the world's top football brand against "fierce competition from Nike by launching a new range of footwear and setting up more grassroots programmes." Adidas said that it "aims to increase sales from football gear at a mid-single-digit rate annually" on average from '15 to '20 on a currency-neutral basis. That is lower than the "high-single-digit" growth rate it "set for group sales in March and reflects the challenges it faces from U.S. rival Nike." The two companies "dominate" a football kit industry worth more than $5B a year, sharing more than 80% of the market for many products. But Nike has been "threatening" adidas' leadership, including in its home territory of western Europe. Adidas said that it would "do more to connect with a broader range of players" with permanent or temporary grassroots programs. Baumann said, "Football still starts on the street. This is where the kids get in touch with the sport." Baumann noted that 226 million unregistered football players worldwide "dwarfed the 30 million registered." Baumann said that adidas would "focus on the top three soccer leagues in the world -- in England, Germany and Spain -- as well as the top 25 clubs." Adidas also "set a target to double currency-neutral sales from its running business" from '15 to '20 by "connecting with local communities of runners and focusing on the North American market, where it hopes for significant market share gains." In addition, it hopes to "increase sales from its sports-inspired fashion brand Originals" by 50% by '20 (REUTERS, 6/24).

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