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Jul 24, 2012
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Adidas sees benefits from healthier lifestyles

By
Reuters
Published
Jul 24, 2012

A new generation of gym-loving pensioners and efforts to combat obesity should help to underpin the sportswear industry in coming years, Adidas CEO Herbert Hainer said on Monday.


Herbert Hainer / Photo: Adidas


Speaking on a rooftop overlooking the Olympic Stadium in east London, Hainer played down fears that a slowdown in China could hurt the German sportswear company in the short term.

"I can only speak for our own business, our own business is doing very well in China," he told Reuters in an interview.

"We were growing double digits last year and we will grow double digits this year," he added.

Industry leader Nike said last month that future orders in China - orders scheduled for delivery from June through November - rose just 5 percent in its fiscal fourth quarter to end May, down from a 24 percent increase a year ago.

Puma, the crosstown rival of Adidas, issued a profit warning last week, a victim of weak European consumer demand.

Adidas releases its second quarter earnings on August 2 and Hainer was unable to go into financial details ahead of that release. However, the industry veteran painted a positive picture of trends in the sector.

He said a pair or running shoes at a price of 60 to 70 pounds was within most budgets and that a desire to stay fitter for longer was common in many countries.

"There is a general trend in society that people want to stay fit, to stay healthy," he added. "People aged 70 go to the gym, they play golf, they walk, they jog. This all plays into the hands of the sporting goods industry."

At the other end of the age scale, Hainer saw getting youngsters active as a way to ease fears over obesity rates in developed nations, again boosting the sector.

"I think we will get a huge problem in society about obesity, especially for kids," he said. "Sport and movement will be one of the factors to counteract that, the other is food of course," he added.

Some critics have said the Olympic movement should stop taking money from long-term sponsors McDonald's and Coca-Cola because of concerns over their effect on health.

The rules to protect sponsors have attracted controversy this year, including a fierce debate on whether individual visitors to the Games would be turned away for wearing t-shirts and shoes from rival brands.

Hainer dismissed this, however, echoing comments last week from organisers. "If it was an organised ambush campaign, then of course LOCOG would step in, but in general this is not forbidden."

LONDON AND OUT

Adidas has invested 100 million pounds in its London sponsorship and associated marketing and believes it is catching up with Nike, the market leader in Britain. It is providing outfits for tens of thousands of Games officials and volunteers, as well as the British team.

"We have a clear target that latest by 2015, we want to be market leader (in Britain) and the gap is closing every day," Hainer said. In terms of their core namesake brands, Nike has 18 pct of the UK market while Adidas is on 16 pct.

Adidas will not sponsor the Olympic Games in Rio in 2016, breaking a run of three summer Games where it has been a major sponsor.

"We always look at the value and what we will get back and what our targets are and secondly, we have the football World Cup ahead of us in Brazil (in 2014), we will put our emphasis there," he said. Adidas is an official sponsor of the FIFA World Cup.

There have been reports that Nike will step in but a company spokesman would not comment on potential sponsorships.

Nike already sponsors the Brazilian football team and has signed up with the Brazilian Olympic Committee to supply podium, village and travel wear for 2012 and 2016.

Turning to football, Hainer said Adidas had enjoyed a strong run this season, supplying kit for Champions League finalists Chelsea and Bayern Munich and Euro 2012 winners Spain.

"With Spain, we sold a little bit over 900,000 Spanish jerseys in a country where we know that the crisis has really hit hard."

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