Adidas Results hit by Reebok writedown

Summary

           Adidas, the worlds second largest sports apparel firm, reported an unexpected loss in the fourth quarter, with results hit by writedowns linked to the weak performance of Reebok (Reuters 2013)

           The group which normally competes with Nike and Puma in the highly competitive market for soccer gear and running shoes, on Thursday it made a fourth quarter operating a loss of 239 million euros with the prediction of 28.6 million euro profit (Reuters 2013)

            It took goodwill impariment of 265 million euros at the pre-tax level to reflect lower growth, Last year Adidas cut it 2015 sale target for Reebok by a third (Reuters 2013)

Opinion

          In my opinion i think ever since Adidas bought out Reebok in 2005, there over all image has gone down, because in Reebok was never one of the top competitors in the sporting good industry.

            Adidas normally competes with huge sporting good company's like Nike and Puma, i think if Adidas bought out a company such as Nike and Puma they would not have had a loss and there sales would have increased, due to the fact that Puma and Nike are more well known brands and also i think it would have been a better career move


Feedback

1. Do you think Adidas made the right decision about buying out Reebok?

2. If Adidas bought out Nike or Puma do you think they would have better sales?

References

Reuters (March 07,2013) Adidas results hit by Reebok Writedown/ Chiagotribune.com

How Global Brand Adidas Slipped in India

Summary

          For a company that sells running shoes, German  sporting goods and apparel powerhouse Adidas has long perferred to tiptope in the indian market. Many global retail giants believe that this is a market where pots of money can be made (Prabhakar 2012).

          But for a market on the backburner, adidas devoted considerable time and emphasis on india while announcing its first-quarter results earlier this month (Prabhakar 2012). Adidas global boss Herbert Hainer said "commercial irregularities" as its Reebok unit in India had wiped out e125 million from its global profits. The problems limited to india, could lead to further charges around 70 million (Prabhakar 2012). These are indeed big numbers but it is not for nothing that Adidas is the worlds second biggest sporting goods company (Prabhakar 2012).

         What could be worrying Adidas is the nature of the losses, Reebok has been a constant underachiever in many global markets since Adidas brought its smaller US rival for $3.8 billion in August 2005 (Prabhakar 2012).  A month before it lifted the lid on the irregularities, Adidas sacked Subhinder Prem (Prabhakar 2012). Prem is credited with Reebok's breakneck expansion in India, Runau and prem did not reply to questions from ET on Sunday on the controversy (Prabhakar 2012)

          Prem has however denied wrongdoing, he responded to the "defamation and termination of services" by launching legal action against the company for its part, and also Adidas has replaced the management at Reebok India (Prabhakar 2012). The situation in India, although unfortunate, will allow us to now accelerate plans to improve a specific under performing part of our business, which was said by Hainer in a statement (Prabhakar 2012).

          To understand the Reebok mess, you must first turn to how Adidas and Reebok were run in India (Prabhakar 2012). Adidas bought Reebok in 2005, but the process of melding the two indian offshoots begam only in May 2011 when Prem was made the heard of the combined entity (Prabahakar 2012). However the Reebok story in India is replete with instances of strategic blunders, corporate mismanagement and financial mischief, according to three people with knowledge of the matter (Prabhakar 2012). Rather than an under-performing asset. Reebok India problems are much bigger.

Opinion

             In my opinion i think this whole deal is for money because in as said in the article there are many market where pots of money can be made, for the simple fact that the global boss Herbert Hainer wiped out e125 million from global profits.

          As many people know Adidas bought U.S rivals Reebok for $3.8 billion, and sales have dropped dramatically, and has been a constant underachiever since being bought out i feel that Adidas hasnt done anything new and exciting for Reebok for example there has been no new merchandise designs or commercials.

      However i do think Prem has wrong doing in this case and was only trying to save himself when he denied that he had wrong doing because he did credit with Reebok's breakneck expansion. Also i completely agree with the statement that the company is not telling the truth, i personally think Adidas is under performing there assets.

Feedback

1. Do you think Adidas is under performing there assets?

2. Do you think Adidas is letting Reebok's reputation fall?

References

Binoy Prabhakar & Chaitali Chakravarty (May 13 2012)/How Global brand Adidas slipped in India/The Economic Times






        

Adidas Joins Wearable Stampede with Fitness Tracker

Summary

          Adidas the footwear and apparel maker, is entering the so-called wearables market. Adidas is introducing wearable devices which happen to be flooding the market.

         However with this new devices being released there has been an expected arrival of a smart watch from Apple with health-tracking capabilities later this year. That release could significantly raise the bar on what people expect from the wearable's, especially if Apple comes anywhere close to recreating the impact it has on Mp3 players and smartphones. (Wingfield 2014).

        Paul Gaudio, the general manager of digital sports at Adidas does not seem worried. On Wednesday, Mr Gaudio is introducing the company's fit smart fitness tracker at a wearables conference in San Francisco (Wingfield 2014).

         The $199 wristband which will go on sale in mid-august, packs most of the same features as other wearables, including the ability to track distance traveled, pace and calorie-burning (Wingfield 2014). It also measures heart rate, which Mr Gaudio said was critical to its goal of providing training programs for people as they shoot for their fitness goals (Wingfield 2014).

        The benefits of Adidas's heart rate monitor will depend largely on it accuracy, which cannot be determined until the product is available for testing (Winfield 2014). Mr. Gaudio said however that Adidas's background in sports gives it a point of view that will help it in the wearable market. "when people set out to get fit, they really dont know what to do", Mr Gaudio said (Wingfield 2014). "They get hurt, get frustrated and quit. This is about helping people get better (Wingfield 2014).

Adidas Gives Digital Makeover to Original fashion stores

 

 

Summary

              Adidas has launched a new store blueprint for its originals fashion brand with a Wi-Fi equipped lounge and mobile charging points, aiming to persuade younger shoppers to linger longer and spending more in its high-margin. (Thomasson 2014)

           The worlds number 2 sportswear maker right behind Nike wants to lift sales from its own shop. (Thomasson 2014) Adidas plans to open a net 250 stores in 2014, primarily in eastern Europe. (Thomasson 2014) In addition to a Wi-Fi lounge near the fitting rooms ad a "digital bar" for charging devices, the revamped store seeks to reflect the Berlin urban vibe by stripping back decor to raw concrete and brick and exposing lighting while underwear is displayed in an eye catching vending machine (Thomasson 2014).

         Adidas also plans to roll out the concept to Original stores in over 30 cities with London and Shanghai next for the makeover, it also has big ambitions for its new teen fashion brand NEO (Thomasson 2014).

       Adidas however has to make sure that the push into fashion does not distract from a core focus on sports performance, because Adidas has been loosing market shares in Europe to Nike (Thomasson 2014). Adidas is also revamping its flagship sportwear stores, seeking to create a statium-like experience and, like the new originals stores, putting a focus on footwear and creating a multio-media experience for shoppers (Thomasson 2014).




Opinion

        In my opinion i think Adidas is making a great decision about re vamping there stores i think it is going to bring in a lot more clientele. The Wi- Fi idea that there putting into the stores is going to bring in much more of the younger shoppers. Adidas is finally at the point in my personal opinion that they need to make changes to there stores because in this industry there is a lot of high competition, especially since Nike has surpassed them and is the number one sportswear maker.

      Adidas is changing and re vamping stores around the world, however i feel that they should be changing the stores in bigger cities because they have more tourism attractions in bigger cities and the population is quite greater. Personally they should be focusing on stores in cities and states such as Rome, Milan, California, Pennsylvania, etc.

     I think the idea that Adidas has to push into fashion can be either a hit or miss because it could take away from the sportswear that Adidas has always been know for. But on the other hand i feel that could be a great career decision because it could bring in a lot more clientele, and people like having many different types of variety when walking into a store.

      I am super excited to see what work Adidas is going to come up with in the next year, and what new fashions are going to come out and also if the clientele increases after these changes are made. As a personal Adidas lover im super excited to see whats in the future for Adidas.

          Adidas 2 Nike 0 in World Cup final but the competition goes on

 

Summary

          With Adidas sponsoring both teams in Sundays world cup final, the German sportswear brand has declared victory over rival Nike in the last round of its battle to remain the biggest global football brand. " (Thomasson 2014)

         While Adidas has supplied the match ball for the world cup since 1970, Nike surprisingly had more teams in Brazil for the first time, 10 out of 32 teams including the host compared to Adidas with the total of 9. Adidas dominated on Sunday, on both teams Jerseys for the first time since 1990. " (Thomasson 2014)" Chief Executive Herbert Hainer, who predicted who were going to be in the finals, stated that "We are once again underlining our position as the Worlds leasing football brand, Adidas is the clear number one in football globally" (Thomasson 2014)

        Despite the fact Nike did not make the final, Chief Executive Mark Parkers says Nike has already overtaken Adidas in boot sales in most countries and predicts a repeat in the current year of the 21 percent rise in football dales the company saw in 2013/14 (Thomasson 2014) However the determination of Adidas to stay ahead in the sport is set to be underlined by a pricey long-term kit supply deal with Manchester United and will be replacing Nike. (Thomasson 2014)

     While Nike started the competition with more hits for its videos and posts, Adidas has pulled ahead in the last two weeks, due to the fact of a youtube clip with Adidas having nine million fews and Nike having only three million. (Thomasson 2014)

Opinion

       In my opinion i think Adidas and Nike are both superior brands and have lots of great quality merchandise, however in this industry there will always be competition. Both Adidas and Nike were sponsoring teams during the World Cup 2014 in Brazil, even though Nike had one more team that they had sponsored, Adidas still came out on top with having both Germany and Argentina in the finals.

    Both brands are very well known around the world, and have huge franchises. both companies do a tremendous amount of advertising which i think does them a lot of justice. Adidas however did come out with a better outcome this year and due to this fact there sales have surpassed Nike sales.

     Even though both teams do much work advertising there brand, Adidas determination to stay ahead all the brands has finally payed off because they are very close to sealing the deal with Manchester united which would be replacing Nike, Personally i think in this time in society the numbers can change because write now Adidas is "flying" because they had two teams in the world cup.

     I personally can not wait to see what happens in the World Cup 2018 and see what teams Nike and Adidas will sponsor and which company brand will make it into the finals and how many teams each of them will have.

Feed Back

1. Do you think after the shock of Adidas having both teams they sponsored in the finals of the world cup, Nike sales will surpass Adidad

2. In the 2018 World cup do you think that Adidas may have the opportunity in sponsoring more teams than Nike, due to the fact of there success in 2014 World cup?

3. Do you personally prefer Nike or Adidas

Refrences