- Adidas’ new CEO Bjørn Gulden hosted his first call with reporters on Wednesday.
- Gulden leaned into the company’s history and hinted at a shift in the company’s focus on direct sales.
- She also took a few shots at Nike’s Goliath, among other things for her innovation.
Adidas CEO Bjørn Gulden took part in his first earnings call with analysts and reporters on Wednesday.
Gulden touched on a wide range of topics, including the renewed focus on wholesale, the company’s Yeezy inventory dilemma, and the pending release of the company’s highly anticipated Fear of God series with Jerry Lorenzo. He also took some candid shots at Nike.
Gulden arrived at Adidas in January after nine years at Puma, where he led a widely acclaimed comeback in sales. Gulden hopes to play that tune again at Adidas, even venturing to say that he thinks Adidas could chase Nike and become No. 1 again.
Here are six takeaways from Gulden’s first interaction with analysts and reporters as a top Adidas executive.
- The DTC is going to slow down.
For years, industry giants Nike and Adidas have focused on direct sales. In 2021, Adidas said it wanted 50% of revenue from direct sales by 2025. On Wednesday, Gulden signaled a shift away from the DTC obsession of recent years, a view increasingly shared by Nike analysts.
“I still think this is a wholesale-based business,” he said. “We have to appear wholesale as the best partner for retailers so they can make money off of us. You can’t own the consumer. You can only win the consumer.”
- He defended Adidas’ performance innovation pipeline while taking a shot at Nike
Adidas is always compared to its biggest competitor Nike. However, Gulden disagreed with criticism that Adidas is not innovating enough in its performance. He highlighted Adidas’ new Adizero running shoes and ‘Predator’ football cleats.
“The criticism that Adidas didn’t innovate in performance is not true. Again, I always ask, so what was the last innovation that Nike brought because you always compare it to them,” he said. I look at the Adizero, I look at the Predator or I look at the football boots that I know but you don’t, I think the Performance side is really in good hands.”
- The Yeezy business is not coming back
Adidas hasn’t made a decision on what to do with its inventory of Yeezys. The company has several options for what to do with the inventory, but none are particularly favorable.
One option seemingly off the table is to work with Ye again. Despite rumors circulating online in recent weeks about a new Yeezy deal in the works to salvage the remaining stock, Gulden said the business is all but lost.
“You have the Yeezy business, which again, in my opinion, Ye is probably the most creative, I would say, person that’s ever been in our industry. The combination with a great marketing job from Adidas on the product, in manufacturing, and especially the way they went digital with the different applications, and the way they actually used the heat, in my opinion, was next to nothing. However, we’ve lost it and we have to let’s face it.”
- Get ready for Jerry Lorenzo, finally.
In December 2020, Adidas announced a long-term deal with fashion label Fear of God and owner and founder Jerry Lorenzo focused on performance basketball and lifestyle products. Given Lorenzo’s popularity, the underperformance of the Ivy Park line, and the end of Adidas’ Yeezy business, Lorenzo could give the company the spark it needs. On Wednesday, Gulden said basketball is critical to the brand’s U.S. business.
“I would mention Fear of God with Jerry Lorenzo as possibly a game-changer that we’re close to bringing to market,” he said.
- There is serious momentum in the Sambas, Gazelles and Spezial sneakers
Adidas’ billion dollar Yeezy business may be gone, but classic silhouettes like the Adidas Samba and Gazelle are skyrocketing in popularity around the world. The sporting goods giant this week launched a very successful pop-up store in Shanghai dedicated specifically to Samba.
“Look for the Samba, look for the Gazelle, and ironically the Spezial, which was actually a handball shoe that I even used when I was playing, which probably tells you how old I am getting. I think it’s something that if managed right, it could be millions and millions of pairs. And it’s the first test to see if we can manage, now, a new franchise the right way by keeping it alive, warming it every quarter, not over-distributing it, so we start to make discounts”.
When Phil Knight founded what became Nike in 1964, Adidas was the goliath of the industry. In no time, Nike zoomed past Adidas. Although briefly dethroned by Reebok, Nike has been the industry leader ever since. It is now almost twice the size of Adidas.
Golden took the stage Wednesday in front of a backdrop that featured Jesse Owens and Muhammad Ali, two sports icons and former Adidas athletes. Both harkened back to Adidas’ days at the top. While Adidas is struggling, Gulden wants to get Adidas back there, noting that it has all the ingredients, including history, a record filled with classic products, global distribution, decades of institutional knowledge and technology.
“We will be the best sports brand again,” Gulden said. “There is no doubt that this is our destiny and that is how you should judge us. We have all the ingredients and I am convinced that we will succeed.”