Adidas Sell Edge Business To Save Themselves

In January 23rd, Adidas announced that it would sell its US shoe brand Rockport at a price of $280 million, and the buyer was a joint venture between its strong rival, new brun and another private Holdings Company.

The sales alerts of fashion sports brands have been heard for many years, and the manufacturers who are in it are obviously not willing to sit back and kill their teeth.

In January 23rd, Adidas announced that it would sell its sports shoes business to a joint venture initiated by new rival company, hoping to take the first step in business revitalization.

According to public information, the brand of Lok step was Adidas's 4 billion dollar income in 2006, and became the sub brand of Adidas group.

Up to now, Rockport has entered more than 55 markets in the world, and in 2007, China has entered nearly 100 stores in China's second tier cities.

Unlike the sport style of the main brand Adidas, Rockport's men's shoes and women's shoes range between business and leisure, and the main factor is technology.

It is reported that the new partnership and the private equity firm Berkshire will set up a company that will buy Drydock brand at the price of $280 million, and the new company will also include the New Berlin's business.

The deal will be completed later this year.

In fact, as early as last May, there was news that Adidas was seeking to sell the Rockport brand. It was reported that the Rockport price was at least $300 million.

The fuse for Adidas to sell Rockport came from poor performance in the first quarter of last year.

According to Adidas's first quarter earnings report in 2014, the net income of shareholders was 204 million euros, a sharp decline of 34% compared with the previous year's 308 million euros, while Rockport's sales plunged 12.1% to 53 million euros.

Correspondents found that the sale price of the joy step was $280 million, which was a little different from the previously announced sale price of at least $300 million.

A number of people interviewed by reporters said that in fact, Adidas's performance in recent two years was not good. Although Adidas released a performance report in the past few days, its sales volume increased by 11% in 2014, while Reebok's sales increased by 5%. However, its performance growth rate is still quite different from that of its biggest competitor, Nike.

According to Nike's recent financial reports, in the 2010 fiscal year, Nike's revenue was 18 billion 324 million dollars. In the 2014 fiscal year (up to May), revenue grew by nearly 50% to 27 billion 799 million dollars, while Adidas's sales increased from 23% to 2010 in fiscal year 2010.

"Adidas's brand focus is not only focused on products, but also more on the layout of marketing, so as to catch up with Nike, the biggest competitor in the market."

A lot of people interviewed by reporters said that now, whether sports brand or fashion sports brand, the way to win by the layout industry is outdated. From the successful experience of Nike in recent years, we can enhance the competitive advantage of products in the core area, so that we can compete for more market share in key markets.

"The Adidas reluctantly sold off and rushed to sell the feature brand that had been acquired before less than ten years ago. In fact, it has a direct relationship with the 5 year development plan that Adidas had previously laid out, but even after buying the Lok step brand, its company's previous 5 year plan has a lot of challenges."

An industry close to Lok Bu brand told reporters.

According to the reporter, as early as 4 years ago, Adidas in the period of rapid growth has formulated a 5 year development plan, on the basis of 2010, 2015.

(excluding exchange rate factors) increased by 45%-50%, increasing by a high single digit per year.

According to the previous plan, based on the global sales of 11 billion 990 million euros in 2010, Adidas's revenue in 2015 is expected to reach 17 billion -180 billion euros.

But this is not the case. According to Adidas's related financial reports, in 2013, Adidas realized sales of only 14 billion 492 million euros, far below the expected annual growth rate of over 10%, that is to say, the income of 17 billion euros in 2015 was impossible.

In response, a number of people interviewed told reporters that they had sold them.

In fact, it is not too late to make up for the rest of the night. It has been dragged down by the impact of the great environment and the results of the previous achievements. The previous 5 years' goal has come to naught, and the successive defeats of the main battlefields of Western Europe and Russia have undoubtedly become the main reason for Adidas's final collapse.

According to the reporter, by the recent two years, the overall high-end sales market sentiment and the old stock liquidation slowly influence, Adidas's Taylor golf brand pressure increased sharply, the profit performance has not reached the expected.

From the second quarter of 2014, after excluding the exchange rate, Adidas brand sales increased by 14%, Reebok increased by 9%, but Taylor Golf dropped 18%.

In addition, its main market share in Europe and Germany is facing Nike's continuous consumption.

Fortunately, the strength of the Chinese market may give some comfort to Adidas, a weak growth company.

Related earnings showed that in 2010,

Sales in the Greater China region were about 1 billion euros, and sales reached 1 billion 655 million euros by 2013. Compared with 2010, it grew by about 66%. In the Greater China region, the target set by Adidas group has increased by 50% in 2015.

But can China's global growth be alleviated only by the rapid growth of the Chinese market? What moves will Adidas take on the market after its success?