Blog: Adidas winning World Cup race
Leonie Barrie | 5 July 2010
An exclusive interview with Adidas Group CEO Herbert Hainer was the undisputed highlight on just-style last week, with a wide-ranging discussion that covered everything from the company's investment in this summer's World Cup, to sourcing, currency effects, and its vision for the Reebok brand.
On the sourcing front, the boss of the sporting goods firm says it has enough diversity in its supply chain to withstand cost increases in China. Hainer says Adidas has limited its reliance on China to less than 40% of products sourced, so it can balance rising production costs and currency effects with cheaper countries like Vietnam and Cambodia.
For western brands and retailers sourcing from Bangladesh, caution is also key as production begins again after orders were caught up in recent violent protests by garment workers. But unless the issues at the core of this long-term and simmering unrest - an increase in the national minimum wage and better working conditions - are addressed, the country seems set to remain a volatile supply base.
Not surprisingly, pressure is mounting on the industry to reach agreement in the latest round of pay talks which are due to conclude at the end of July.
On the retail front, American Eagle Outfitters is taking its 77kids brand from the internet to the high street for the first time, with brick-and-mortar stores opening from next month and a line of clothing launching for babies up to 18 months old. Seven 77kids stores will open their doors in the US from July onwards.
Meanwhile Australian clothing firm Billabong International is to expand in Canada after agreeing to buy West 49 Inc, one of its retail partners in the country, for CAD99.0m (US$93.5m). The move will raise the profile of its brands in Canada's action sports market as well as increase wholesale opportunities.
And JC Penney Company has taken another step in differentiating itself from its competitors by joining forces with footwear maker Aldo Group, which will open shop-within-a-shop concepts in 600 of its department stores. From the autumn, JCPenney will become the exclusive US department store retailer for Aldo's Call It Spring brand.
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