Apparel and shoe creator adidas has come out with its final numbers for 2017, which show the company (made up of adidas’ own brand and Reebok) being up 31% in Q4 2017 and up 27% in the calendar year 2017 overall.
What stands out the most is that brand adidas experienced double-digit sales increases in the ultra important running category as well as at adidas Originals and adidas neo. In the quickly developing training sector, adidas also improved by high-single-digit sales increases year-over-year.
Revenues at Reebok brand were not as strong as the brand continues to find its niche within a very saturated apparel and shoe space that is dominated by Nike, shared by adidas and has brands like Under Armour, Skechers and K-Swiss doing whatever they can to bite away some of the behemoths’ market share. In fact, Reebok’s sales in the U.S. declined in 2017, which the company says reflects a significant amount of store closures in the market.
Overall, adidas is happy with the results from 2017.
“2017 was a strong year – financially and operationally. We made great progress toward achieving our mission to be the best sports company in the world. Our strategic growth areas – North America, Greater China and Digital Commerce – were the main drivers of our performance,” said adidas CEO Kasper Rorsted. “2018 is a key milestone on the road to achieving our long-term targets for 2020. We expect quality growth, with overproportionate bottom-line improvements. This will enable an even stronger increase in profitability by 2020 and allows us to upgrade our long-term target yet again.”
In the past few years adidas has seen its brand bolstered by smart partnerships with influencers such as Kanye West and Pharrell, as well as a shift in focus from creating and selling basketball shoes to putting a premium on running. Now, the company will be challenged to continue its rapid rise up the leaderboard in the apparel and shoe category, and close the still large gap between itself and Nike. At the same time, it will need to prevent against Under Armour, in particular, eating away market share as it too begins to think about how it can access some of the growing running market.
“A few years ago, we decided to put a lot of energy, resources and investments in the North American marketplace — at a level that we had not done in the past … What we’re doing is focusing on key cities and in America — those are New York and Los Angeles — which set the trends for young consumers,” said adidas North America president Mark King in 2017. “We’ve [done this so far] with all kinds of activations that make those cities come alive with our brand. We take advantage of sporting events, local athletes and leagues, and we launch a lot of our products in these key cities — [which] keeps our brand cool.”
Will it remain cool as it grows even further?