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 The world's second-biggest sportswear firm behind Nike laid out its
strategy on Thursday as it seeks to claw back market share from its
U.S. rival.
It said it would extend across the group supply chain innovations
pioneered by its NEO teen fashion brand which already gets new
products into store in 45 days, compared with an industry standard
of 12-18 months.
Adidas said it would focus marketing on six big cities, Los Angeles,
New York, London, Paris, Shanghai and Tokyo. The firm, which until a
decade ago only sold its products wholesale, also plans to expand
sales from its own retail space, including new stores, and more than
quadruple annual e-commerce revenues.
The company said it would target high single-digit percentage sales
growth each year in 2016-2020, stripping out currency fluctuations,
and a rise in net income of around 15 percent per year on average -
both above the targets it has set for 2015.
It expects sales to rise to above 22 billion euros ($24 billion)
from 14.8 billion in 2014.
Nike, which last week reported quarterly profit that beat market
estimates, is growing even faster, targeting revenue of $36 billion
by fiscal 2017.
Adidas shares, which have risen 20 percent so far this year in part
due to high expectations for the strategy presentation, were down
1.8 percent at 0914 GMT, in line with the German blue-chip index <.GDAXI>.
Chief Executive Herbert Hainer, who was criticized last year after
he was forced to abandon targets set in the company's previous
five-year plan, admitted the strategy lasts beyond his contract
which runs until 2017, but said it was a team effort.
"I will do everything I can to get it off to a great start," he
said.
AUTOMATED UNITS
The company said last month the board had launched a formal search
to replace Hainer, in the job since 2001, although the CEO has said
that did not mean his departure was imminent.
Global brand chief Eric Liedtke, seen as one of the strongest
internal candidates to succeed Hainer, was the first to speak after
the CEO at Thursday's event.
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Adidas said it is testing automated production units that would
allow it to shift manufacturing from Asia closer to consumers and
even into stores, where shoppers will be able to personalize their
own garments and shoes.
"Our 2020 vision is to have fully automated and scalable
manufacturing wherever we want and wherever the consumer desires
it," said Claire Midwood, who runs the NEO brand.
Adidas wants to "dramatically" expand product customization options,
tapping into a trend for co-created products like its ZX Flux
sneakers that consumers can design online with personal images
printed on the uppers.
Adidas wants to further expand its own retail spaces to account for
above 60 percent of sales, from about half in 2014, with e-commerce
revenues to grow to above 2 billion euros by 2020 from 422 million
in 2014.
It expects its cash flow to grow at a faster rate than operating
profit in the next five years, allowing it to raise its corridor for
future dividend payments to 30-50 percent of net income from a
previous 20-40 percent.
($1 = 0.9104 euros)
(Editing by Georgina Prodhan and Pravin Char)
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