Company Overview

The Adidas brand, which has been around since the 1940s, continues to dominate the athletic shoe industry, right behind archrival Nike. In an effort to expand beyond its traditional niche, Adidas acquired Salomon, a French sporting goods manufacturer, for $1.4 billion in 1997. Typifying its strategy of making strategic divestitures as well as acquisitions, Adidas sold Salomon in 2006 and bought Reebok to focus on its more profitable footwear, apparel, and golf sectors. And with the sale, the company changed its name to the Adidas Group. In recent years, the company has also opened retail outlets in several countries, to gain visibility with consumers and to help differentiate itself from its non-Nike competitors. In 2004, the company acquired Valley Apparel Company, which makes professional and collegiate sportswear. In 2005, the company introduced a new line of women’s sportswear designed by fashion designer Stella McCartney, daughter of Paul and Linda McCartney. Adidas won sponsorship rights for the 2008 Olympics to be held in Beijing, and as part of its planned global expansion (and strategy to beat Nike in China), announced it will open an average of one and one-half stores a day in China for the next two years, substantially adding to the 2500 already in operation there. The firm also has plans to buy out Reebok distributors worldwide to regain control over the brand. And in April 2006, Adidas signed a deal to be the NBA’s official supplier of uniforms and other products for 11 years.