Adidas CEO Herbert Hainer Says London Games Help Narrow Nike's Lead In Market
Adidas' sponsorship of the London Games has helped the company close the gap with the U.K.'s market-leader, Nike, narrowing a 3% advantage to 1%, adidas CEO Herbert Hainer said. "We have clearly closed the gap," Hainer said, adding that the goal is to supplant Nike as market leader in the U.K. by '15. "I am sure the Olympics has helped already but will help us also over the next 17 days to bring the elements to the consumer that shows them that we are the Olympic brand for all the different sports and not just football." Adidas this year is projecting a 12-17% increase in its earnings per share, boosting total earnings to more than $925M. Sales are expected to increase modestly from $16.4B in '11. In addition to the Olympics, it sponsored UEFA's European Championships earlier this summer. The company signed a reported $100M sponsorship deal with London organizers in '07. Adidas spent more than $3M to put a wrap featuring its British athletes around the Metro newspaper, which is free every morning and read by millions of people taking the Underground. It also outfitted some 6,000 volunteers working the London Games in jackets, shirts, pants and shoes, and it has extensive out-of-home advertisements highlighting its sponsorship of the British national team. Hainer: "I am pleased with the exposure we have been getting the last few weeks, and what I see in the city."
CLEAR TARGETS: This is the second consecutive Summer Games sponsored by adidas, following its sponsorship of the Beijing Games in '08. The company also sponsors FIFA's World Cup, which Hainer credited with boosting the company's soccer division's sales by as much as $2B. Hainer said the Olympics don't provide as much of a direct benefit as the World Cup because the soccer tournament results in the sale of countless national team jerseys and balls. The Olympics, he said, are less about sales and more about exposure. Hainer: "There are clear commercial targets (with football). This is not the case with the Olympics. If you are great with the 100 meter (dash), no one goes off to a store and buys a sprint shirt (jersey). But what it does is, for 17 days in a row, exposes your brand to I don't know how many billion cumulative people who go watch the Olympics."
BUILDING THE BRAND: Adidas' Beijing Games sponsorship helped it build its business in China, Hainer said, expanding to 5,000-plus stores across the country. He said he was "extremely pleased" with the results there and credited it with helping the company increase sales there to more than $1B. Despite the benefits the Olympics offered adidas in China and London, it opted not to pursue a sponsorship of the '16 Olympics in Rio. Nike reportedly has signed a deal to sponsor the '16 Games. Hainer said adidas felt sponsoring the 2014 World Cup in Brazil and '16 Olympics would be redundant, so the company decided to concentrate on the World Cup because soccer is the most popular sport in Brazil, as well as worldwide. The company will begin its marketing push for the World Cup in Brazil around next year's Confederation Cup (SPORTSBUSINESS JOURNAL, 7/29 issue).