Adidas says Kanye West collaboration has ‘elevated brand perception’

Adidas upped its marketing spend by 31% in 2015 as it predicted a positive outlook for 2016, fuelled by its bid to drive ‘long-term brand desire’, and talked up the success of its shoe collaboration with rapper Kanye West.

West, who has collaborated with Adidas on the limited Yeezy Boost trainers, has “elevated the brand in the US and beyond”.

Adidas’ chief executive Herbert Hainer, speaking on an analyst call today (3 March), said: “The collaboration with Kanye has elevated our brand perception in the US and beyond. It has really set the stage for strong double digit growth for 2016.

“We want to keep on releasing the Yeezy trainers and to build on the momentum they’ve given us in the US market. The shoe is making Adidas stand for something unique.”

The sports brand narrowly beat analyst expectations in its fourth quarter as it increased sales by 15% to €4.167bn on a net loss of €44m – analysts had predicted sales to hit €4.167bn.

Adidas saw a particularly strong performance in Western Europe and North America, with sales up 31% and 12% respectively. This growth far outpaced the Adidas Group’s struggling Reebok brand, which saw only 5% growth for the period.

Coming in the next few months are Euro 2016 and the Rio Olympics, Adidas says it is confident the “global buzz” can help it close the gap with close rival Nike. It expects sales and profits to both increase by between 10% and 12% for 2016.

Over 2015, it increased marketing spend by 31% and the rise follows a renewed focus on marketing for the German brand. Last March, Adidas announced it would focus marketing spend on six global cities (Los Angeles, New York, London, Paris, Shanghai and Tokyo) and ramp up co-creation efforts in a bid to increase “brand desirability” and quicken sales and profit growth. It says the strategy will help Adidas to create a “new European marketing organisation”.

Earlier this year, meanwhile, it appointed Roy Gardner in the newly created role of VP of brand activation management.

“2015 was a very successful year for the Adidas Group. We reached all of our major financial goals and exceeded our initial top- and bottom-line targets,” said Adidas’ CEO Herbert Hainer. “Our 2015 performance is a picture-perfect example of a successful comeback in sport. As a Group, today we are stronger and in better shape than ever before.”

For the full year 2015 financial year, Adidas saw sales rise by 10%, and Hainer said a global focus will be key to making 2016 “another successful stage.”

Adidas has already announced that Kasper Rorsted will come on board as its new CEO later this year as it aims to win back dominancy in the US market where it trails behind Nike and Under Armour.

Hainer added: “2016 will be another successful stage in our race to becoming the best sports company in the world and achieving the Group’s long-term financial ambition. Our brands are benefiting from the ever-increasing relevance of sport in the lives of people around the globe.

“Our products are in high demand with consumers in every part of the world. Our order books are full across all major performance and lifestyle categories. And our brands are set to shine at this year’s major sporting events. This gives us every confidence that we will again grow the top and bottom line at a double-digit rate this year.”