Adidas Commences “Transition Year” Under New Leadership
Bjorn Gulden, who crossed his German town from Puma SE headquarters to become CEO of Adidas on Jan. 1, isn’t afraid to offer an honest assessment of the challenges that he and his new brand face in 2023.
“We are trying to change to be a more service-oriented brand for retailers, especially in the U.S.,” the Norwegian senior executive who previously worked for Adidas told analysts last week. Later, he added that Adidas should retain its DNA and a business model that is different from rival Nike, although performing like the Swoosh does today should be an objective for Adidas over the long-term.
In Q4, the company’s North American sales rose 6 percent in constant currency to the equivalent of $1.65 billion. For FY22, the region’s revenues increased by 12 percent in constant currency to the equivalent of $6.85 billion, driven by strong sales from key product launches in soccer, running and outdoor.
Gulden, for one, is bullish about Adi’s growth prospects in the running segment after a decade with comfort-focused Boost technology. “I think we will be super, super competitive in running going into 2024,” he remarked, adding the brand is bringing back the Supernova next year.
In this transitional year, besides coping with high inventory levels and a “challenging H2 order book,” Adidas must accelerate its speed to market and consumer demand for its lifestyle products and sportswear as it develops a strategy for disposing of discontinued Yeezy inventory that may result in a $535 million profit hit if its needs to be written off the books.
“Speed and agility, I think that’s something that we all have to get,” proclaimed Gulden. “…There is a big, big need in the market that is changing to be much faster than adidas currently is.”