What is Adidas’ net worth and brand value in 2020?
|Net Worth:||$16.48 Billion|
|Earnings:||$23.64 Billion (2020)|
|Founded:||August 18, 1949|
|CEO:||Kasper Rørsted (2016–present)|
Adidɑs is a multinational company, which was founded in Germany in 1924. The sports brand specializes in the production and design of sports cleats, jerseys, clothes, and other accessories. Adidas ranks as one of the world’s largest manufacturers of sports wears.
Aside from American rival Nike, no other company has its tentacles extended as deep as Adidas in the world of Sportswear production. Despite being widely recognized as Europe’s top sportswear manufacturer, Adidas has its tentacles extended to ownership of a football club and a tech fitness company.
The German-based corporation serves as the Parent Company of the Adidas Group, through which it exercises its duties as an 8.33% shareholder in Bundesliga giant, Bayern München, and owner of an Austrian fitness company, Runtastic.
The success Adidas has experienced through the last 96 years and 70 years of existence as Adidas has been dramatic, considering the split that ended up resulting in the Adidas and Puma brand’s establishment. The perseverance and persistence of the Adidas brands, brings to mind, the adaptive nature of Europeans.
With an emphasis on Adidas’ brand value, we’ll review its establishment, growth, achievements, and earnings.
Adidas Brand Establishment
Following World War I, Adolf “Adi” Dassler, a young German man, began making sports shoes in his mother’s laundry room. The birthplace of the Adidas was in a laundry room in Herzogenaurach, where the company’s current headquarters is located. Adolf’s elder brother, Rudolf, became part of the business, and the company Dassler Brothers Shoe Factory was founded.
The two brothers were determined in the production of the sports shoes, that they resorted to a bicycle’s pedal power to provide electricity, to produce shoes. Aside from being resolved, they were also innovative. They made spiked shoes, but rather than the dense metal spikes widely used then, the brothers introduced canvas and rubber.
The Dassler Brothers Shoe Factory enjoyed significant success after the 1936 summer Olympics. At the 1936 edition of the Olympics, sprinter Jesse Owens, who was successfully persuaded by the brothers, to make use of their hand-made spike shoes, claimed 4 Gold medals. That had a significant effect on the Adi Dassler shoe brands, as words spread quickly, which led the company to produce 200,000 shoes annually before World War II.
The outbreak of World War II had little effect on business. The brothers who were members of the Nazi Party was the last shoe manufacturing company operating in Germany at the height of the war. They made shoes for the German unified Armed forces, known as Wehrmacht. At one of the factories owned by the company, they manufactured anti-tank weapons. That factory nearly got destroyed by American troops, but thanks to Adolf Dassler’s wife, who convinced the soldiers that they were only interested in the manufacture of sports shoes. The Americans not just spared the factory but became regular buyers of the Dassler shoes.
In 1947, the brothers’ relationship soured, which led Rudolf to establish Ruda, now known as Puma. Adolf went on to rename his company to Adidas AG. He formed the name, from his nickname, Adi, and the first three letter of his last name, Dassler.
The feud between the brothers affected the Herzogenaurach community. The town got the moniker, “the town of bent necks,” due to the feud, as people looked down to see what brand of shoe others wore. The dispute affected the town’s two domestic football teams, as 1 FC Herzogenaurach supported Ruda, while ASV Herzogenaurach endorsed Adidas AG.
In 1952, Adidas AG company began using its 3-Stripe logo after buying it for €1600 and two whiskeys from Finnish sports brand, Karhu Sports.
Adidas Brand Growth
The feud between the brothers certainly thrust Adidas into the spotlight. With the Dasslers’ reputation as a seasoned shoemaker, and with much publicity, sales climbed. One factor that helped sales rise was the strategic use of endorsement deals, which the brothers had previously benefited immensely. The Adidas company changed hands from the Dasslers in 1989, when Bernard Tapie, a French industrialist, bought the company for ₣1.6 billion (€243.9 million), which he loaned.
Following the acquisition, Adidas moved production to Asia and began a new wave of publicity, which led Adidas to hire an American superstar, Madonna, for positive PR. Following Tapie’s inability to repay the loan, he instructed the Crédit Lyonnais bank to sell the company. The debt was then converted to equity in the company. That course of action was widely unusual and was a personal favor to Tapie, who was Minister of Urban Affairs.
Adidas was sold for ₣4.485 billion (€683.514 million) to Robert Louis-Dreyfus, who became CEO of Adidas. Robert Louis Dreyfus helped shoot up the brand’s revenue to as high as $7.5 billion between 1993 and 2000. Within that period, Adidas made several acquisitions, such as its acquisition of the Salomon Group and TaylorMade Golf. In 2005, Adidas bought Reebok for $3.8 billion. These acquisitions made Adidas, Nike‘s staunchest rival.
In 2006 Adidas penned an 11-year deal with the NBA, which will make it the official Jersey provider for the NBA, WNBA, and NBDL. Adidas bought Five Ten in 2011. By 2012, Adidas was recording its highest revenue in history. The year 2015 saw Adidas acquire Runstatic. In 2017, Adidas pulled out of the golf industry, when it sold TaylorMade for $425 million.
Endorsement deals have particularly helped Adidas remain relevant. Deals with top stars such as Lionel Messi‘s life long deal with the brand have helped it stay a notable sports brand. Partnership and Sponsorship of sports tournaments with vast reaches, such as the FIFA World Cup, has played a unique role in Adidas’ marketability.
Below are some of the most interesting Adidas achievements.
- Second largest sportswear manufacturer worldwide
- Europe’s largest sportswear manufacturer
- Accounts for 6% of the US sportswear market
- Accounts for 10% of the US footwear market
- Owns 1,190 stores worldwide
- Boasts of 59,533 employees
- Produced 448 million footwears in 2019
- Produced 558 million apparels in 2019
- The athletic shoe company with the highest American customer satisfaction index score in 2019 (Source: Statista)
Adidas Net Worth in 2020
As of 2020, Adidas’ net worth is approximately $16.48 billion, a $2 billion increase from what it was in 2018. In 2019, Adidas generated €23.64 billion in net sales, with footwear accounting for the most sales. Adidas has increasingly spent more on marketing in recent years. The company spent $3 billion on marketing in 2018 alone.
Adidas Brand Value from 2016–2020
|Year||Brand Value (in US dollars)|
After its 2019 fiscal year, Adidas generated $23.6 billion in revenue. That was the highest revenue the company has recorded in the 21st century. Its sales of footwear brought in more than 50% of its revenue. The sports brand recorded €1.977 billion in net income, the highest it has recorded in the 21st century. For the first quarter of 2020, the company’s fiance took a big hit, as 70% of its stores were closed down, which recorded a revenue of €4.753 billion (2019: €5.883 billion) in the first quarter of 2020. Its net income was considerably low, as Adidas recorded €20 million (2019: €631 million).
People Also Ask
What does Adidas stand for?
Adidas, written by the company as “adidas” is a combination of the founder’s nickname “Adi,” taken from his first name, Adolf, and “Das,” taken from the first three letters of his last name, Dassler.
Why are there two Adidas logos?
In 1997, Adidas did a makeover of their “Three Stripes” logo, slanting it like a triangle. The slanted three stripes logo appears on the brand’s sports equipment brand. The second most iconic logo, “The Trefoil,” along with the three-striped design, came into existence in 1971, majorly used for the brand’s Originals, such as the apparel and leisure lines.
Who owns Adidas now?
As of 2020, the CEO of Adidas is Kasper Rørsted. The baton was passed to him in October 2016, after Herbert Hainer held the position for fifteen years. Rørsted was appointed to the companies Executive Board in August 2016, and by October, he became the Chief Executive Officer.
Where are adidas shoes made?
Just like other major sportswear brands such as Nike, Reebok, etc., Adidas’ manufacturing facilities are in Asia, with majorities located in China and Japan, as well as in the US, Finland, and Canada.
Does Adidas own Reebok?
In 2005, Adidas bought rival Reebok for $3.8 billion. the acquisitions made Adidas, Nike‘s staunchest rival in terms of global dominance.
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