COMMENT: Route 2015 drives both Adidas and Nike
Standing firm: Nike is taking an aggressive retail approach
An ongoing two-horse race between Nike and Adidas looks set to continue well into the next decade.
And while the German company has today (8 November) vowed to topple its US rival, both know they are setting an ambitious pace for each other.
Adidas told investors in no uncertain terms that it is "to lay the foundation for leadership in the sporting goods industry by outgrowing its major competitor in the next five years".
It follows a five-year strategy plan by Nike in May, when it targeted revenues of US$27bn (EUR19.4bn) by 2015.
Adidas' strategic plan, called Route 2015, is aiming for sales of EUR17bn by the same date, which begs the question of how it will then become "the leading sporting goods company in the world".
But assuming that both companies meet their targets, Adidas is hoping to steal a march on Nike by improving its bottom line, or in other words profit.
In a statement emailed to just-style, Adidas outlined plans for annual earnings growth rate of 15% and said it wants to reach an operating margin of 11% sustainably by 2015 at the latest. The company also announced efficiency projects across the group, including planning, virtualisation and organisational efficiency.
Adidas also wants its Adidas and Reebok brands to take clear positions in the marketplace, with Adidas targeted at competitive sports and Reebok as its fitness and training brand.
"Brand success means business success for the Adidas Group, that's why we have set out clear business targets based on our strong and unmatched brand portfolio," explained Adidas CEO Herbert Hainer.
In terms of geographical distribution, North America, Greater China, Russia/CIS, Latin America, Japan, UK and India have been identified as key growth markets.
Some of Adidas' goals are in keeping with Nike's, which is also aiming for mid-teens earnings growth, but Nike is also investing heavily in retail. It reopened its flagship store in London this week and plans to build 250-300 stores globally over the next five years.
Going on current form, Adidas saw its third quarter net profit rise 25% to EUR266m this month, reporting group revenues up 20% to EUR3.468bn. Nike, meanwhile, continues to lead the way with its most recent quarterly sales up 8% to US$5.2bn (EUR3.73bn), as net income increased 9% to $559m.
Nike will post its second quarter earnings just prior to Christmas, and it will need to keep up with the double-digit sales growth of its closest rival.
As with many ongoing sporting battles though, the real loser can often end up being the rest of the field.
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