Adidas 2000 Annual Report Download - page 54

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International Markets
In 2001, economic trends in the world’s major markets appear
likely to remain mixed. With global growth having lost momen-
tum in the second quarter of 2000, an economic slowdown is
expected, particularly in the United States. In Europe, economic
growth also remains a question mark. The current consensus
among banks is that real GDP growth in 2001 will be lower
than 2000 in all the major European countries, while other eco-
nomic indicators including unemployment and inflation appear
to be moving in a positive direction. Overall consumer confi-
dence increased in the last quarter of 2000 and seems likely
to continue on the upswing. The outlook for Asian and Latin
American markets is cautiously optimistic. Economic recovery
in Japan should continue, and expectations are improving,
although there are many negative signals for other countries
within the Asian market.
Sporting Goods Sector
Provided there are no major negative macro-economic trends,
the sporting goods sector is expected to continue its recovery
in 2001. Indicators of this include: strong sales improvements
and positive order backlog development for major US sporting
goods retailers in the second half of 2000, a move from consol-
idation to a more appropriate sizing and location of retail space
and improved backlogs among competitors, in particular niche
brands. In addition, all of the major brands have announced
major technology or design innovations to be launched or
available at retail during the course of 2001.
As a result, growth is likely to continue in the sector. But there
are trends which cause some concern for profitability of the
sporting goods sector. In the United States, for example, while
the overall footwear market has grown, the average selling
price of shoes has declined 3.6% according to the Sports
Trend market research. This provides evidence to retailers’
com mentary about the strong promotional tendencies in the
market. In Europe, prices are increasing, in particular for foot-
wear, which is sourced by all major brands in the Far East,
meaning the high US dollar of the last year has had a strong
effect on the purchase prices. The question for this market will
be how successfully the companies are able to pass on their
price increases to the market. In Asia, a similar trend to that of
the United States is expected, with cautious spending behavior
in the recovering economies.
adidas Rejuvenation through Originals,
Basketball and New Designs
In the strategy section of this report, we present the new global
marketing strategy for the adidas brand. In 2001, the new
divi sional structure will be in place to start delivering positive
results for the Group. In the ORIGINAL division, for example,
we anticipate double-digit growth as it expands its offering into
the apparel segment.
FOREVER SPORT will also profit from its new, more streamlined
business unit structure. By focusing more on our core sports
categories, both cost savings and sustainable top-line growth
can be achieved. In particular, we are excited about the outlook
for our basketball products, which are quickly gaining profile in
the global marketplace. Following the introduction of the highly
successful and premium-priced The KOBE basketball shoe in
2000, the basketball category will release: follow-up colors, The
KOBE 2, the Mad Handle and a variety of other top-end
basketball shoes in 2001. These shoes, which have all already
been previewed by retailers, have been received very positively
and should propel momentum in this important category.
Another essential factor for the adidas brand outlook is the
introduction of new designs to the market in the second half of
2001. Over the last year, improving design was given high
priority status within adidas. Starting with the Fall/Winter 2001
collection, there is a notably more urban-oriented look and feel
to our products that feature muted or less visible three stripes.
Salomon Growth to Continue,
Synergies with Mavic to Increase
As a result of the continued innovative strength and the
increasing profile of Salomon products, we are currently
projecting double-digit growth from the Salomon brand in
2001. On a regional level, the strongest growth will come from
North America, where Salomon products are currently less
represented than in other major markets, and as a result of
the re-introduction of our inline skates.
Strong product categories are likely to be:
 Alpine skis, where our revolutionary Pilot ski system will
be offered in its next generation and supported by other
top-end skis.
 Inline skates, with a broader offering, renewed products and
the re-introduction in the United States.
 Apparel, where our first Salomon collection will be available
to consumers in Fall/Winter of 2001.
Additionally, the integration of Mavic with Salomon, which
began in 2000, will continue in 2001. By utilizing the same
design and back-office facilities we expect synergies between
the two brands to further increase.
TaylorMade-adidas Golf will Lead Sales Growth for the Group
In 2001, the brand repositioning of TaylorMade will continue.
With increased marketing and sales support to target the elite
golfer, we anticipate solid growth in all the major golf markets.
Central to this development will be strong positive response
to our new 300 SeriesTM golf clubs. Continued growth of the
adidas Golf products is also expected.
Outlook