Adidas to ramp up marketing spend despite group losses

Adidas is to ramp up marketing investment for its flagship adidas and Reebok brands following sales gains in its latest quarter despite facing pressure to cut costs as group losses widen.

The sportswear maker said in a statement today (5 March) that it will increase its sales and marketing spend in its current financial year with a particular focus on point-of-sale marketing “to secure and drive faster growth rates and market share gains”, focusing on its North American and Western European markets.

The move comes following good momentum in the sales of its adidas and Reebok brands, which were up 11% and 1% respectively in its latest financial quarter.

However, these increases did not stop the group’s widening losses, with gross profit decreasing by 1% to €6.924 billion versus 
€7.001 billion in the prior year due to growing costs.

Herbert Hainer, adidas group CEO, said: “2014 was a year with ups and downs for the adidas Group. But we tackled the challenges resolutely and achieved our adjusted top- and bottom-line targets. In the fourth quarter, we grew at double-digit rates in Western Europe, Greater China, European Emerging Markets and Latin America. This shows that the momentum at adidas and Reebok is fully intact.”

The Group’s other operating expenses as a percentage of sales are expected to be around the prior year level of 42.7%.

We will ensure that our bottom line grows faster than our top line,” Hainer said. “With these improvements, we are laying solid foundations for our new strategic business plan which we will present at the end of March.”

Earlier this year, Adidas launched its “Superstar” campaign featuring Rita Ora, David Beckham and Pharrell Williams.

https://www.youtube.com/watch?v=0HYGOB7Ofa0

Reebok also kicked of its “Be More Human” brand campaign earlier this year urging consumers to live up to their full potential.

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