German firm Adidas: Leadership in soccer products means profitable World Cup year in 2010

Adidas focuses on soccer market leadership in 2010

FRANKFURT — The 2010 World Cup in South Africa, which kicks off a year from now, will help German sportswear company Adidas AG increase its presence in the world soccer market, the company’s CEO said Wednesday.

The Herzogenaurach-based Adidas, the world’s second largest sportswear company by sales after Nike, Inc. of Beaverton, Oregon, said its partnerships with FIFA, the organizer of the World Cup, and with many national teams puts the company in a strong market position prior to the world’s most-watched sports tournament.

In 2006, when Germany hosted the World Cup, Adidas beat its own expectations with about euro1.2 billion ($1.7 billion) in revenues for soccer items alone, as fans snapped up jerseys and balls during the monthlong tournament.

During the European Championships in 2008, Adidas generated euro1.3 billion in soccer sales, its highest level ever.

The company didn’t make a 2010 sales projection Wednesday, but Herbert Hainer, the company’s chief executive, told reporters next year would be profitable.

“I think even in times of crisis, football has the power to draw,” Hainer said, referring to the bleak sales situation amid the global economic crisis. “In 2010, we’ll definitely reach the highest sales level for football sales. We are well-positioned to further extend our market leadership in football again next year.”

Adidas said it would start selling 2010 World Cup products during the second half of 2009.

“As official sponsor, Adidas will supply the official ball of the tournament and equip officials, referees, volunteers and ball kids. Additionally we outfit the host team South Africa,” he said.

Since the 2010 tournament is the first World Cup in Africa, Adidas plans to use the event to present itself to fans on the continent. It said it expected to generate “double-digit sales growth in South Africa for years to come.”

Adidas has a world market share of about 34 percent in soccer products and more than 50 percent in Germany and the U.S., according to independent research groups NPD Sports Tracking Europe and SportScan.

Adidas is the supplier to national teams including Argentina, Germany, Spain, Mexico, Japan, Russia, China, South Africa and 15 other African national teams. The company is also the official sponsor, supplier and licensee to the 2014 World Cup, being held in Brazil.

Shares of Adidas were up 7 percent at euro27.64 in late Frankfurt trading.

www.adidas-group.com