Adidas has set ambitious goals to increase sales and profitability over the next five years as it continues to lose market share to rivals Nike and Under Armour.
Adidas said Thursday that it expects to grow profit by 15% every year until 2020 (up from the 7%-10% increase it expects in 2015) and grow sales sales by almost half to more than $US24 billion by 2020, Reuters reports.
The company’s five-year plan, which it revealed at an investor meeting on Thursday, includes a proposal to use robots to bring manufacturing back to Europe and to the US from Asia.
The company said it’s also planning to open hundreds of new stores.
The stakes have never been higher for Adidas. Its North American sales have been falling for the past three years and Under Armour recently rose to become the No. 2 sportswear company in the US behind Nike, pushing Adidas to third place.
Here’s some of the company’s key proposals:
1. Adidas will employ robots — possibly in stores — to build customised shoes, moving some manufacturing from Asia to Europe and to the US.
“We will bring production back to Europe. We will bring production back to where the main markets are,” Chief Executive Herbert Hainer said, according to Reuters.
The company’s machines would allow shoppers to print their names and personalised logos onto sneakers.
“Our 2020 vision is to have fully automated and scalable manufacturing wherever we want and wherever the consumer desires it,” said Claire Midwood, who runs Adidas’ NEO brand, Reuters reports.
2. The company will reduce the time it takes for products to go from the design phase to store shelves.
The average turnaround from design to store shelves is about 18 months, which prevents Adidas from capitalising on emerging fashion trends, according to The Wall Street Journal.
The company says it is working on reducing the turnaround time to six months.
Moving production closer to main markets through the use of automation would cut out at least six weeks, which is how long it takes Adidas to ship products from Asia to Europe.
3. Adidas plans to add more “American flavour” to its products, Adidas’ North American chief Mark King told The Journal.
The company is opening its first US-based design studio — outside of its US headquarters — in Brooklyn this year to Americanize more of its products. Adidas poached three former Nike designers to run the studio.
4. Adidas will open hundreds of new stores and invest more in marketing in six key cities, including Los Angeles, New York, London, Paris, Shanghai and Tokyo.
“If we win running in New York and Los Angeles, we will win running in the US,” said Roland Auschel, head of Adidas’s global sales, according to The Journal.
5. The company will aggressively invest in more athlete sponsorships — an area where Nike has always excelled. Adidas has decided not to renew its ~$US36 million per year apparel deal with the NBA and will instead invest in doubling its NBA player sponsorships by 2020.
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