Despite what many would say was a good summer season for sports brand adidas, chief executive Herbert Hainer is not too happy with the company’s financials.
Following the recent financial results, he said: “It is with disappointment that, after such a great summer of sport” the group has still not been able to live up to its high financial expectations.
To counter this, the brand will launch its most ambitious brand campaign yet that will “once and for all tell the world why adidas is the best sports brand in the world” said Hainer. adidas aims to increase its marketing spend by 200 million euros.
“We know consumers love our brands when they hear our stories. Therefore, we will be bringing even more of these to life on the streets, screens and stores in the future, to ensure consumers constantly hear what we have to say,” said Hainer.
Aside from the World Cup, the brand faced several key challenges throughout the year in other areas such as golf and retail.
The golf industry faced an extremely difficult year and adidas’ TaylorMade-adidas Golf sales were down 18%. This amounted to a 236 million Euro sales decline in the first six months compared to a year ago.
Meanwhile, the retail segmental profitability, particularly in the second quarter, was heavily influenced by the brand’s performance in Russia. Gross margins in the retail segment declined 4.9 %, mainly related to an extended period of promotional activity through the summer months as well as the impact from the year-over-year devaluation of the Russian rouble.
The growing crisis in the region also had an impact on retail sales for the brand.
To make its push for next year's campaign, adidas has signed a contract with Manchester United in a deal worth a record £70 million annually to keep up its football frenzy. The deal will kick off at the start of the 2015. Hainer said the visibility of adidas and the commercial success the brand captured during the summer is a timely reminder of just how effective the company can be when it is focused and committed.
Overall, sales in the football category climbed 41% and adidas also sold more than 8 million World Cup jerseys. With Brazuca, the brand also delivered one of the most successful and best-selling Official World Cup Match Balls ever, with more than 14 million balls sold.