Adidas is making a bold move into the outdoor apparel market, aiming to capitalize on its growing popularity and resilience compared to the struggling sports goods sector. According to a report by the European Outdoor Industry Association, sales of European outdoor clothing are expected to rise by 0.7% in 2009, outperforming the declining sporting goods market. This segmented and dynamic industry has caught the attention of Adidas, which sees a significant opportunity to expand beyond traditional sports.
Currently, The North Face, owned by VF Corp., dominates the $59 billion global outdoor market with annual sales of $2.74 billion. However, Adidas is stepping up its efforts to challenge this leader. In 2010, the company plans to launch a range of high-end mountaineering jackets priced at €400 (around $595), targeting the premium outdoor segment. These jackets, developed using advanced technologies like FORDOTION and Gore PRO SHELL fabrics, are designed for extreme conditions, capable of withstanding altitudes of up to 6,000 meters.
Despite a recent decline in profitability due to the financial crisis, Adidas remains optimistic about the outdoor market's potential. Its third-quarter report showed a 30% year-on-year drop in net profit, but the company is now focusing on diversification. Rolf Reinscht, head of the Adidas Outdoor Division, stated that the goal is to become a top brand in functional clothing by 2015. “We want to be among the top ten in the outdoor industry,†he said, though he did not reveal specific strategies or figures.
Globetrotter, Europe’s largest outdoor retailer, is also showing confidence in Adidas’ new direction. The Hamburg-based company, which generated $205 million in revenue in 2008, plans to stock Adidas’ new hiking shoes in 2010. Meanwhile, Adidas has been actively building its presence through partnerships and endorsements. The company has hired the Huber brothers, renowned climbers, and supported mountaineer Reinhold Messner, further strengthening its image as a serious player in the outdoor space.
While The North Face continues to grow, other major players like Columbia have faced challenges. Columbia reported a 4% drop in third-quarter revenue to $434.5 million, and revised its full-year growth forecast downward. In contrast, Adidas shares have risen 30% this year, outpacing both The North Face and Columbia.
The outdoor industry is proving to be resilient even during economic downturns. As one industry expert noted, people still seek outdoor products as a way to escape daily pressures. With its strategic investments and product innovation, Adidas is positioning itself to capture a larger share of this thriving market.
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