Jul 10, 2014
Adidas 2 Nike 0 in World Cup final but competition goes on
Jul 10, 2014
BERLIN - With Adidas sponsoring both teams in Sunday\'s World Cup final, the German sportswear brand has declared victory over U.S. rival Nike in the latest round of its battle to remain the biggest global soccer brand.
The two companies dominate a soccer kit industry worth more than $5 billion a year, sharing more than 80 percent of the market for many products, but Nike has been threatening Adidas' leadership, including in its home territory of western Europe.
While Adidas has supplied the match ball for the World Cup since 1970, Nike kitted out more teams at the competition in Brazil for the first time, 10 out of the 32 teams including the hosts, compared with nine for Adidas.
However, the three stripes of Adidas will dominate the pitch on Sunday, on both teams' jerseys for the first time since 1990 and on many of their star players' boots as well as the match officials\' clothing and the ball.
"Adidas will be the most visible brand by far in the World Cup final," said Chief Executive Herbert Hainer, who had predicted a Germany-Argentina final well before the two teams beat Nike-backed Brazil and the Netherlands in the semis.
"We are once again underlining our position as the world\'s leading football brand. Adidas is the clear number one in football globally," Hainer added in a statement.
It is not clear how long that will last.
Adidas expects record soccer sales of $2.7 billion in 2014, topping the $2.3 billion Nike reported for its financial year to end May. While the periods are not directly comparable, Nike has suggested the U.S. firm could exceed the Adidas figure for 2014 in its fiscal 2014/15.
Despite the fact Nike teams did not make the final, the Portland-based firm which has only been a serious player in soccer since the World Cup was held in the United States in 1994, sees no sign of growth in soccer slowing down.
Chief Executive Mark Parker says Nike has already overtaken Adidas in boot sales in most countries and predicts a repeat in the current fiscal year of the 21 percent rise in soccer sales the company saw in 2013/14.
"The United States offers huge potential in particular, enthusiasm for football is there in any case. And in China there are tremendous growth opportunities," Parker told Germany's Handelsblatt daily in an interview published on Wednesday.
The determination of Adidas to stay ahead in the sport is set to be underlined by a pricey long-term kit supply deal it is expected to seal with English soccer club Manchester United, replacing Nike.
Adidas shares, hit in recent months by exposure to Russia and other volatile emerging markets, fell to a 16-month low on Wednesday on concerns around the price of the Manchester United deal. The stock was down 0.8 percent by 1106 GMT.
"The possible deal with Manchester United would lead to rising marketing costs and the profit dynamism of Adidas is also weak," said Warburg Research analyst Joerg Frey.
Adidas, whose sponsorship of each World Cup is estimated to cost about $100 million, predicted a "modest increase" in sales and marketing costs in 2014 due to the competition, without giving figures. Nike said total marketing expenses rose 36 percent to $876 million in the quarter to end May, mainly due to expenditure related to the World Cup, with an executive predicting a rise of 30 percent in the current quarter too.
The German company, which was founded by shoe maker Adi Dassler in 1949, admits it faces a "head-to-head" race with Nike in the boot business, but has predicted it would sell 2 million pairs of the special shoes it designed for the World Cup with striking black and white patterns. Nike has not given a forecast for World Cup boot or shirt sales.
According to sports app theScore, players wearing the Adidas boots scored 78 of the 166 World Cup goals so far, not counting penalties, including five of Germany's seven semi-final goals against Brazil. Nike players scored 73 and other brands 15.
Adidas players dominate the list of top World Cup scorers, including Colombia\'s James Rodriguez, Argentina's Lionel Messi and Thomas Mueller and Andre Schuerrle of Germany.
Brazil's Neymar, who Nike provided with golden boots from the second round, was also a big scorer but missed the semi-final due to a serious back injury. Other top Nike players like Cristiano Ronaldo of Portugal and Rooney of England had disappointing tournaments.
While most national team jerseys are sold ahead of the World Cup or in the early stages, Euromonitor's Kondej said Brazil\'s failure to reach the final could dampen Nike sales of Brazil shirts both in the host nation and abroad in coming months.
Adidas said it expected to sell more than 8 million World Cup shirts, including more than 2 million of the Germany jersey, with more than half a million of those sold outside Europe.
Adidas and Nike have also fought a fierce battle off the pitch to grab attention on social media, with Adidas setting up a "newsroom" in Rio to generate real-time content after Nike dominated unofficial marketing at the 2010 competition.
While Nike started the competition with more hits for its videos and posts, Adidas has pulled ahead in the last two weeks, with Adidas scoring nine million views for its clips on YouTube to three million for Nike, according to marketing intelligence firm Origami Logic, which advises big brands on social media.
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