Seizing control of the brand is key for retailers
News this week that Adidas is to open more branded stores marks a continuing shift by clothing manufacturers to gain more control of their brands, following similar moves from competitors Puma and Under Armour and luxury brands including Burberry and Missoni.
Adidas has previously stated that it wants 50 per cent of group sales to come from ‘controlled space initiatives’ by 2015. These include its own stores, as well as its websites and shops within shops, which currently stand at 45 per cent of group sales.
It also has ambitious plans for its website to allow it to sell more products direct – launching a combined brand and store website last year, providing one ecommerce ‘destination’ for each of its brands with a target of €500m in annual sales by 2015. Currently the channels account for €158m, according to its latest annual report.
Ecommerce is one area that it wants to control in particular: last year it banned retail partners from listing its products on eBay and Amazon to make sure that products are ‘presented in the right environment at all times’.
This is a positive move for the company and one which has worked for other brands, particularly those in the luxury sector.
Burberry is a case in point. Back in the late 1990s, the then chief executive Rose-Marie Bravo realised that the brand had lost its way and worked out it should stand for (Britishness, a blend of function and fashion and being luxurious but accessible) – which is something that was much needed at the time. She also tightened up its licences.
One of the things current chief executive Angela Ahrendts has done is to continue that sense of control, bringing its licensed perfume and make-up businesses in house, a process that was completed earlier this year. Not only does this mean that the brand and its image can be better controlled, it also means it gains more from sales of the products.
Growth of fragrance had been particularly slow, “significantly underperforming the rest of the group in the past five years”, according to Ahrendts, who adds that beauty is “a growth platform of the future”. These products are two of the most accessible for people – they might be able to treat themselves to a £39 bottle of perfume but upwards of £395 for a trench coat is out of reach for many.
Luxury Italian knitwear designer Missoni has also bought production of its handbags in house, a key part of expanding its accessories business.
While a strategy of control may seem a difficult one to pull off for a high street label such as Adidas, previous examples show that it is worth it. As Puma has stated, this allows it to “maintain a distinctive brand identity”, something all marketers should strive for.
