Adidas Is Very Confident In Changing Kasper Rorsted.
Adidas AG (ADSGn.DE) Adidas group, the world's second largest sporting goods manufacturer, today officially announced the appointment of Kasper Rorsted as the new chief executive to replace the current CEO Herbert Hainer, who has been testing shareholder patience because of poor performance.
Kasper Rorsted, 53, is now the CEO of Henkel AG & Co. KGaA (HNKG_P.DE), Henkel, Germany's daily chemical giant.
The group suddenly announced today
Kasper Rorsted
He has resigned and is leaving in April 1st. The group has appointed Hans Van Bylen, the head of beauty care, as her successor.
Henkel AG & Co. KGaA (HNKG_p.DE) lost a maximum of 5.2% in early trading on Monday, while Adidas AG (ADSGn.DE) was surged by up to 12.3%, the largest intraday gain in more than 7 years.
Kasper Rorsted will join the board of Adidas AG Adidas group in August 1st, Herbert Hainer will step down in September 30th, and Kasper Rorsted will officially take over in October 1st.
Herbert Hainer is the longest serving CEO of Adidas AG Adidas group and Germany DAX index group. In 1987, he was hopping from Procter & Gambler Co. (NYSE:PG) Procter & Gamble group to Adidas AG Adidas group as Germany sales director, and promoted to Chairman and chief executive officer in 2001.
In 2014, the two sides renewed their contracts until March 2017, but the discontent of board of directors and investors gradually increased. In early 2015, Herbert Hainer disclosed that the group had started looking for new CEO.
Adidas AG Adidas group lacks enough in recent years.
Growth momentum
And the industry leader Nike Inc. (NYSE:NKE), Nike group is drawing farther and farther.
In 2014, it also issued a profit warning for the two time because of the weak golf business and the weakness of the North American market. Although the latest three quarter financial reports show that all two businesses have been revived, the share of the strategic market share in the United States has been eaten up by powerful local competitors such as Under Armour Inc. (NYSE:UA) and Lululemon Athletica Inc. (NASDAQ:LULU) and so on. The status of the second major sports brands of Adidas Adidas is also occupied by Under Armour Andrew.
Investors have been hoping that Adidas AG Adidas will recruit new recruits from outside, so that it is more likely to take decisive measures such as the sale of Reebok core and other non core businesses to enhance profitability.
Shareholders dissatisfied with Herbert Hainer in addition to their performance, the Reebok Reebok brand, which was purchased in 2006 for 3 billion euros, also disappointed investors.
Despite the initial success of the Reebok Reebok brand pformation fitness brand, analysts expect the brand to break even at the operating profit level in recent years, but it has failed to help the group retain its market share in North America.
In the past 8 years, Kasper Rorsted, the chief executive of Henkel AG & Co. KGaA Henkel group, has been regarded as the perfect candidate by analysts.
Kasper Rorsted has successfully cut costs for the group through restructuring, and he has done business in revitalization of North America.
Under his leadership, the group's annual revenue grew by more than 1/3 over the past 8 years, and its operating profit margin increased to a record high. The share price of Henkel AG & Co. KGaA (HNKG_P.DE) increased by more than 2 times.
Ingo Speich, a privately held fund Union Investment fund manager holding about 1.2% shares of Adidas AG Adidas group, said that the appointment of Kasper Rorsted is "a very good decision". He believes that Kasper Rorsted not only has the professional experience of consumer goods business and technology industry, but also has a global vision and a perfect combination of German.
Ingo Speich said he hoped that the day of weak profitability of Adidas AG Adidas group will end.
2014 fiscal year Adidas AG
Adidas
The group's operating profit margin is only 6.1%, which has shrunk by 210 basis points over the 2013 fiscal year, and is only half the Nike Inc. Nike group.
According to the data, in the last three quarters, it benefited from the recovery of TaylorMade-Golf golf business and North American business, and the sales and profits of Adidas AG Adidas group were all growing strongly. The group raised its annual sales, gross margin and net profit expectations.
Adidas AG, chairman of the board of supervisors of Adidas group, Igor Landau expressed gratitude to the Herbert Hainer for many years in the announcement, and stressed his achievements. He pointed out that during his term of office, the group's income increased by two times, and net profit and employee number increased three times. The market value of the group also rose from the original 3 billion euros to now more than 18 billion euros.
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