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The German sportswear giant is regaining momentum under the leadership of its new CEO, who joined the company in January after coming from Puma, while its American rival is struggling to meet expectations.
The view over the whole of Paris is spectacular, matching Adidas’s renewed ambitions. During the Olympic Games, the three-stripe brand set up at Le Dernier Étage, near Montmartre, to welcome athletes, partners, influencers, and the media. The entrance may look rather unassuming, but a few floors up, the new Adidas House Paris, managed by Paris Society, has attracted a steady stream of stars, including Zinedine Zidane, Pharrell Williams, Shirine Boukli, and Bixente Lizarazu.
“The world needs the Olympic Games; it needs to come together around a shared passion for sport,” says Bjørn Gulden, CEO of the German sportswear company. “The event does not have a major economic impact on Adidas, but it provides an opportunity to showcase the brand’s strengths.”
At the helm since January, the former Puma executive has brought new momentum to Adidas and reignited its long-standing rivalry with Nike, the American company that leads the global sportswear market. His task, however, is far from easy. The end of the Yeezy partnership, following the split with Kanye West in October 2022, was a major blow. But the American rapper’s controversial behavior forced the company to draw a line under the most lucrative collaboration in its history.
“We were caught in a downward spiral.”
“Nous étions dans une spirale négative”
In his long-term effort to get Adidas back on track, Bjørn Gulden is scoring points in Paris. The three-stripe brand is not an official sponsor of the event, but it is impossible to miss on the podiums thanks to the athletes it sponsors — including Noah Lyles, who won gold in the 100 metres — as well as the sports federations (handball, athletics, etc.) and national Olympic committees (Great Britain, Poland, etc.) whose teams it outfits.
“We were caught in a downward spiral when I arrived. That is over now,” says Gulden. “I have focused on the customer, the product and distribution. You must always meet customers’ expectations before trying to increase margins. By doing so, we are gaining market share from Nike, although that is not my priority. The success of the Samba, Gazelle and Spezial is the best proof of this.”
These models date back to the 1970s and 1980s, but Adidas has brought them back into fashion. They have been the brand’s best-selling products for the past eighteen months.
In mid-July, Adidas raised its full-year outlook after a better-than-expected second quarter. Revenue rose by 9% to €5.8 billion, thanks to “reduced discounting” and “lower sourcing costs.” But there is more to the improvement than that.
Bjørn Gulden has thoroughly reviewed the company’s operations. He simplified the brand’s logo, strengthened relationships with retail partners, while continuing to open 100% Adidas stores. He has also expanded the brand’s focus across a wider range of sports. After the Olympi
Earnings Forecasts Revised Downward
For its part, Nike still retains its impressive firepower. In March, the American company brought an end to a decades-long partnership between Adidas and the German Football Association, becoming its official kit supplier from 2027. It was a major blow for the three-stripe brand and for Germany as a whole.
Even so, Nike has disappointed investors. In June, the group’s shares fell by nearly 20% following the announcement of weaker results. Fourth-quarter revenue declined by 2% and, more worryingly, management expects sales to fall by 5% during the current financial year.
Even more than for Adidas, the Olympic Games have become the ideal stage for Nike to showcase the power of the Swoosh brand and its ability to bounce back.
“The Olympic Games are an exceptional opportunity to share Nike’s love of sport and athletes,” says Heidi O’Neill, President of Consumer, Product and Brand. “We are delighted with the success of our new ‘Winning Isn’t for Everyone’ advertising campaign among both the general public and athletes, whom we support in more than 80% of Olympic disciplines.”
In addition to setting up its Nike Athlete House opposite the Olympic Village, the American company secured a prime showcase at the Centre Pompidou. There, Nike is highlighting its ability to innovate through its Air technology, designed to optimize athletes’ performance.
All the Colors of the Rainbow
“Nike may still be the world’s largest sportswear company, but for some time now the momentum has been in favor of Adidas and newcomers such as Hoka and On,” says Sandrine Zerbib, President of Baozun Brand Management, a subsidiary of Baozun, a Chinese e-commerce company listed in Hong Kong and on Nasdaq.
“Adidas is riding the ‘Terrace’ trend — lifestyle sneakers with a relatively sleek silhouette — by bringing back very old models in every color of the rainbow. Nike has not really come up with an effective response in terms of product and marketing innovation.”
Moreover, the success of challengers such as Hoka and On is creating more shelf space for brands at multi-brand retailers. Adidas is benefiting from this more than Nike, which had invested more heavily than any of its rivals in a “direct-to-consumer” strategy through its own stores and online platform.
To get Nike back in the race, CEO John Donahoe quickly introduced a series of major measures. These included rethinking the company’s relationships with retail partners, as well as stepping up efforts in marketing, innovation and communication through bolder campaigns. A workforce reduction plan affecting 2% of Nike’s global employees is expected to generate $2 billion in savings and help restart the company’s growth engine.
Even more than Adidas, Nike has the resources to bounce back. But it must also be wary of its own size. Its scale can naturally hinder creativity and entrepreneurial spirit at a time when exceptional agility is needed to succeed both on the sports field and in everyday life.