Retro Styles Could Jumpstart Adidas’ Recovery — But Innovation Is Crucial

Adidas has had a rough couple of quarters. Sales hits due to Covid-19, factory shutdowns, inventory excesses and the loss of its Yeezy partnership in October 2022 have had a heavy toll on the German sportswear brand, which also faced a CEO transition in January.

The label has also recently struggled with generating “brand heat,” according to a Tuesday note from WedBush analyst Tom Nikic. But according to the analyst, growing momentum for Adidas’ 90’s retro styles could be “green shoots,” or recovery indicators, for the brand moving forward.

More from Footwear News

“Certain ’90’s retro styles such as the Samba, Gazelle, and Campus have been gaining momentum,” Nikic wrote. “They’re generating significant buzz on social media, they’re among the best-selling styles on, and online search trends for these franchises have exploded in recent weeks.”

Retro styles The Samba, Adidas’ soccer sneaker, has become a fashion mainstay for celebrities and the fashion-forward in recent months. The Adidas Gazelle shoe, which launched in 1966, is also one of the hottest shoes of the moment, with the Retro performance sneaker making it on the Lyst Index’s top ten Hottest Product List for Q1 2023.

The current tends mimic a previous pattern for Adidas, where retro silhouettes come back in favor in a major way years after they were initially released. Circa 2014, Adidas’ Stan Smiths sneakers experienced a similar resurgence. The style won the 2014 Footwear News Achievement Award for “Shoe of the Year” and has cemented itself as a timeless silhouette.

Adidas will need to balance this demand for nostalgia with an introduction of newness via technologies and innovation, Nikic said. For example, Nike has also leaned into demand for heritage styles via its Air Jordan franchise but has incorporated newness into some launches via its “Reimagined” series.

“It remains to be seen if they can produce the ‘newness’ to capitalize on the recent green shoots, but for a brand that has been desperate for some good news lately, this development is a much-needed positive.”

Adidas reports earnings for the first quarter on Friday morning. Nikic said it will be too early to see the impact of these Retro trends, but its impact on the full-year might be more pronounced.

In Q4, Adidas revenues fell 1% in currency neutral terms to 5.2 billion euros, reflecting a negative impact of around 600 million euro related to the loss of the Yeezy business. Adidas indicated it might rebrand and sell existing Yeezy product to help mitigate losses.

Best of Footwear News

Sign up for FN's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.

Click here to read the full article.