Falling sales over the past three years in North America are forcing adidas to shake things up to recapture market share. Now the No. 3 sportswear company in the US behind Nike and Under Armour, adidas have set a number of ambitious targets to increase sales and profitability over the next five years.
This week adidas Group held an investor meeting at Herzogenaurach to go over the brand's five-year plan, in which they expect to grow profit by 15% each year until 2020 (up from the 7%-10% increase it expects in 2015) and grow sales sales by almost half to more than $24 billion by 2020, Reuters reports.
Listing a number of key proposals as they aim to fight back adidas are set to open hundreds of new stores and activate new manufacturing strategies. Firstly, adidas will employ robots, possibly in stores, to build customised shoes, which would move some manufacturing from Asia to Europe and the US, where the main markets are.
"Our 2020 vision is to have fully automated and scalable manufacturing wherever we want and wherever the consumer desires it," said Claire Midwood, adidas' NEO brand, Reuters reports.
adidas are also aiming to reduce the time it takes for products to go from the design phase to stores. The average turnaround from design to store for an adidas product is about 18 months, which potentially prevents adidas from capitalising on emerging fashion trends, according to The Wall Street Journal. The brand are looking to half that time to six months.
In a bid to recapture ground lost in the States adidas plan to add more "American flavour" to their products, adidas' North American chief Mark King told The Journal. As we already know adidas are opening their first US-based design studio in Brooklyn this year, led by the three former Nike designers, Denis Dekovic, Marc Dolce and Mark Miner.
Hundreds of new stores will be opened worldwide and added investment in marketing will focus on six key cities; Los Angeles, New York, London, Paris, Shanghai and Tokyo. Another interesting tactic is that adidas vow to aggressively invest in more athlete sponsorships (something they already do strongly in football) an area where Nike has always excelled. Having decided not to renew their $36 million per year apparel deal with the NBA adidas will instead invest in doubling its NBA player deals by 2020.
It's all change at adidas HQ. What do you think of the Three Stripes plans? Drop us line below.
