Adidas pins 2014 hopes on World Cup after sales dip

Adidas has underlined the importance of the forthcoming World Cup to gaining market share in Europe after a string of high profile marketing initiatives failed to spark a receovery across the region in 2013.

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Adidas is pinning its hopes on the upcoming World Cup to breathe life into wilting sales across Western Europe.

Revenue across Western Europe fell 6 per cent year-on-year to €3.8bn (£3.1bn) for the 12 months to December, mainly due to demand slumps in the UK, Italy and Spain where it has come under increased pressure from Nike. Adidas showed signs of recovery towards the end of the year, however, when revenue across the region rose 1.9 per cent for the three months to December.

The sales blip reflects the brand’s decision to slash marketing costs in 2013 in the absence of a major event. Campaigns for its Boost range and sponsorship of Barcelona FBC star Lionel Messi were not enough to lift demand.

In response, the German sportswear maker said marketing spend this year would increase “modestly” compared to a 3 per cent rise the prior year with investments focused on key sporting events such as the FIFA World Cup. Adidas expects the activity to help spur sales this year at a “high-single” rate.

It is also banking on its revamped retail strategy, which is still being implemented, to drive sales by positioning itself as a more premium brand. The business is pulling its products from smaller and cheaper retailers across Europe in favour of larger outlets such as Footlocker and JD Sports alongside the expansion of its own retail footprint.

The retail drive lead to higher-margins worldwide in 2013 with retail sales rising 8 per cent year-on-year to €3.4bn (£2.8bn). Total sales climbed 3 per cent to €14.5bn (£11.9bn) in the period.

Herbert Hainer, Adidas chief executive, said: “We finished 2013 with an exceptionally strong fourth quarter. This ensured that we met our revised full year targets from September, despite a further worsening of currency exchange rates.”

The announcements come a day after Hainer revealed he would stand down in March 2017 after 16 years as the group’s chief. The company’s global chief of brands Eric Liedtke could be in the running to take the helm after being promoted to the executive board at the turn of the year.

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