Adidas set for marketing blitz to kick-start sales

Adidas is forecasting marketing spend will rise this year, a trend likely to continue in 2014 as the company looks to next year’s World Cup to reverse declining sales.

Adidas2014WC-Product-2013_460
Adidas predicts 2013 marketing spend will increase year-on-year.

The sportswear maker posted a 7 per cent year-on-year drop in revenue for the three months to 30 September as falling demand in key European markets such as the UK, Italy and Spain hampered growth.

It also cited distribution problems, which it moved to reverse last month with a new pan-European senior management structure, and poor sales of golfing products for impacting revenue.

Despite the decline, Adidas has ramped up its marketing around running and retail in 2013 in the absence of a major sporting tournament. It predicts marketing spend for the full-year to be “above the prior year level” with chief executive Herbert Hainer claiming “positive feedback” for its upcoming collections” has given the group “confidence”.

The sportswear maker is pinning its hopes on next year’s World Cup to help revive underperforming sales, which have dogged the business all year. It issued a warning on sales and profit in September.

Adidas’ decline has been in stark contrast to rival Nike, which saw revenues in its last quarter jump 8 per cent and said recently it is also planning to exploit the “energy” around next year’s tournament in Brazil.

Hainer adds: “We have dealt swiftly and decisively with our challenges in the third quarter to ensure we return to growth. Momentum will clearly return to our business in the fourth quarter and beyond.”

One positive sign for the Adidas brand this year has been the growth of Reebok, which saw sales increase 5 per cent year-on-year in the quarter. It is the second consecutive quarter the brand has posted growth as its renewed focus on fitness shows signs it is starting to bare fruit.

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