Sports apparel giant Adidas-Salomon AG on Thursday announced the creation of a new division for fashion sportswear as it looks to fight back against rivals Nike and Puma in the lucrative streetwear market.

Led by top Japanese designer Yoji Yamamoto, the new Sport Style division will produce shoes, clothes and accessories for men and women in the 25 to 35-years age group, with its first lines hitting boutique shelves in the spring or summer of next year.

Adidas chiefs say they expect the new designer clothing and footwear division – which will be debuted this October - to contribute around five per cent of total sales over the next 5-10 years.

They added the new range is seen as generating margins over its goal of 41-43 per cent. Adidas’ sports unit currently garners around 85 per cent of sales, with its retro fashion division bringing in around 15 per cent of total sales.

Adidas marketing chief, Erich Stamminger, stated: "In the 1980s, we missed the running trend and the aerobics trend. I told myself 'now that we have this chance we are going to make the most of it'."

Yamamoto added: "My customers have been struggling to find nice sportswear for their everyday life. Sometimes the cut is bad and the colour mix can be awful."