On the heels of a stellar 2016, Adidas AG is in a bullish frame of mind.
During the company’s investor day at its Herzogenaurach, Germany headquarters on Tuesday, CEO Kasper Rorsted laid out an ambitious strategy for the firm’s U.S. growth. Specifically, Adidas’ chief said he expects to see the brand’s revenues climb nearly 50 percent over the next three-plus years to hit $5.3 billion by 2020.
Those results, Rorsted said, will hinge on the firm’s ability to engage athletes and “win in the locker room;” appropriately manage a robust product franchise; aggressively target key markets such as Los Angeles, New York, Atlanta and Chicago; land and sustain prime wholesale partnerships; and most importantly execute a second-to-none digital and omnichannel strategy.
“If we don’t get this right, we won’t be successful as a company long term,” Rorsted said.
While acknowledging Adidas’ vigorous U.S. expansion — the brand’s revenues advanced 30 percent in the region in 2016, bolstered by an 80 percent gain in Originals, 40 percent in running and 25 percent in U.S. Sports — Rorsted came short of praising the short-term growth, highlighting that his focus is farsighted.
“A high percentage rate is reflection of what the starting position is,” the CEO said. “It’s easier to have a high percentage growth when you have a low starting position.”
He further said: “What we should not do is try to do is get to try to get a quick resolution to our situation in the U.S … We’re not a short term race here, we’re in a long term race.”
Rorsted — who joined the firm in October, replacing Herbert Hainer — said he’s looking to digital as the best way to accelerate the brand’s relationship with consumers.
In a CNBC interview today, Rorsted doubled down on his comments regarding a ramped up digital focus: “It’s clear that the younger consumer engages with us predominately over the mobile device,” Rorsted said. “Digital engagement is key for us; you don’t see any TV advertising anymore.”
Adidas’ chief also said during investor day that the brand will target more premium shelf space in U.S. retailers Foot Locker Inc., The Finish Line and Dick’s Sporting Goods.