Thursday June 21, 2012
Nike and Adidas lead suppliers’ battle for gold in London Games
HERZOGENAURACH (Germany): American market leader Nike and German rival Adidas are locked in their own Olympic battle to boost athletes’ performance and squeeze maximum value out of next month’s Games in London.
The Games provide a showcase for new fashions and advances in technology which sportswear suppliers hope will drive sales at a time of economic turmoil in many of their markets.
Unlike soccer’s World Cup, Olympic venues carry no perimeter advertising, making the suppliers of kit and shoes the most visible brands when the eyes of the world are on the Games.
“This puts the likes of Nike, Adidas and Puma firmly in the spotlight in the most emotionally-charged moments,” said Danny Townsend, president EMEA and South Asia at brand analysis company Repucom.
“Endorsement deals with athletes who are likely to gain substantial coverage, such as Usain Bolt or Jessica Ennis, pack an immense punch,” he added.
“Our projections from the Beijing Games indicate around 3.6 billion people worldwide saw at least some TV coverage which gives a strong indicator to the power of this presence. This level of brand exposure is a potent force in driving sales.”
Jamaican triple gold medallist Bolt is the poster boy for Germany’s Puma, the third largest sporting goods company behind local rival Adidas.
“The Olympics is probably the biggest platform you can have as a sport brand. With Usain Bolt running the 100m, 200m and relays, the whole world will focus on that on TV,”said Puma CEO Franz Koch.
Adidas have invested heavily to be the official sportwear partner of the Games, with tens of thousands of volunteers and Olympic officials to wear their familiar three-stripe outfits.
That comes on top of a long-standing deal to provide the kit for a British team which includes heptathlete medal hope Ennis, the photogenic face of the host nation’s squad.
“We’re kitting out 5,000 athletes and 84,000 volunteers with three million pieces of apparel,” Adidas Olympics head Simon Cartwright told Reuters at the firm’s headquarters in the small German town of Herzogenaurach, which is also home to Puma.
Adidas estimates the interest generated by the Games will bring it an extra £100mil (US$157mil) of sales in the UK, helping it on its way to overtake rival Nike as market leader there.
Cartwright says the situation is similar to that in Beijing, when the Games helped it to top the market there in 2008.
“Adidas has got its foot on the accelerator. They’ve thrown down the gauntlet to Nike because they want to take market leadership in the UK. Nike is more focused on Rio (2016),” said a manager in the sports sponsoring industry.
Based in Portland, Oregon, Nike remains the global market leader, with annual sales of almost US$21bil against $17bil for Adidas. Puma, formed in 1948 after brothers fell out at Adidas, is a distant third with sales of $3.8bil. — Reuters