Reebok 2006 Annual Report Download - page 57

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Brand Segments › » adidas
Basketball: Leveraging Our Partnership with the NBA
Increasing our presence in the basketball category repre-
sents another key component of our adidas brand strategy.
We believe our success in this category is particularly depen-
dent on our ability to develop and communicate the adidas
view of basketball as a team sport. Our product and market-
ing initiatives therefore promote the importance of the team
as shown by our “It Takes 5ive” basketball campaign launched
in 2006 (see Campaigns and Products, p. 117). In this con-
text, we see our new long-term partnership with the NBA as
a critical asset. This partnership provides the adidas brand
with exclusive licensing rights to all NBA on-court and warm-
up apparel as well as NBA-branded footwear for all teams.
Additionally, the partnership ensures adidas’ visibility at all
2,460 NBA games and allows us to effectively promote and
harness our outstanding roster of individual players includ-
ing Tracy McGrady, Kevin Garnett, Gilbert Arenas, Chauncey
Billups and Tim Duncan. Together with the NBA, we will be
able to seize business opportunities in a creative and inno-
vative way as we did, for example, with the successful intro-
duction of an NBA-specific collection of our iconic Superstar
shoe featuring a version for each of the 30 NBA teams. As the
NBA is well-known and highly popular around the globe, the
partnership represents a vehicle to drive the adidas basket-
ball business not only in North America but also in Europe
and particularly in Asia. In China, for example, basketball
is the most popular sports with over 80 million active bas-
ketball players. By leveraging our well-defined distribution
network in China, we intend to exploit the untapped poten-
tial in the basketball category, which will help us achieve our
long-term ambition of becoming the leading basketball brand
worldwide.
Training Apparel: Technology and Sport Fusion Drive Growth
Training apparel is another important category for the adidas
brand across our men’s, women’s and kids’ businesses.
Clima, our leading moisture management and temperature
control system, continues to be a core platform for the cat-
egory. We are segmenting it further in 2007 to meet the grow-
ing consumer demand for functional, performance collections
with products featuring ClimaCool®, ClimaLite®, ClimaProof®
and ClimaWarm® technology. TechFit™, led by innovations in
the emerging compression apparel market, is another inte-
grated concept that will be an important growth driver. In
addition, to meet consumer demand for comfortable, stylish
and athletic leisurewear, we are targeting significant growth
in 2007 through sport fusion concepts which translate sports-
inspired lifestyle themes into style-relevant apparel.
Women’s: Increasing Our Connection with Consumers
Increasing our position in women’s is another critical element
of the adidas brand strategy. Over the last two years, collec-
tions that have been designed and developed in collaboration
with fashion designer Stella McCartney have set industry
standards in combining performance and fashion features.
This has helped us to increase the attractiveness, relevance
and functionality of our products. We have extended this
successful partnership until 2010 and we will further expand
our product offering in the women’s segment with our new
Adilibria and Fuse collections.
adidas Sport Heritage: Healthy Growth of Sports Lifestyle
The adidas Sport Heritage division has been a significant
growth driver over the last years and has made the adidas
brand a trendsetter in the market for the sports lifestyle con-
sumer. No other brand can draw upon such a strong history in
sports products that inspire the development of authentic and
contemporary lifestyle and street wear products of the future.
“Celebrate Originality” is our key message to address the
sports lifestyle consumer and all our product and marketing
messages are built around this idea. To ensure future sales
growth and continued leadership in the sports lifestyle mar-
ket, we will continue to broaden our product offering into new
areas and at the same time strengthen our key concepts such
as the legendary Superstar shoe. Our “Freizeit” and “Sleek”
collections, which we will launch in 2007, clearly highlight
this approach (see Campaigns and Products, p. 117). We also
intend to further capitalize on our successful partnership with
Missy Elliott. As part of this partnership, we launched a sig-
nature collection called “Respect M.E.” that generated strong
sell-through in 2006. To prevent dilution of the adidas brand
as a result of oversupplying the market, we will continue our
selective distribution strategy, which will also help us retain
the high gross margins we generate with our product offering
in this division. In the medium to long term, we intend to pro-
duce up to 30% of adidas brand revenues in this division.