Reebok 2008 Annual Report Download - page 20

TaylorMade-adidas Golf was very resilient in a tough golf market. Will you be
able to continue this performance in 2009?
Looking back at the year 2008, we cannot ignore the magnitude of TaylorMade-
adidas Golf’s success. Sales increased 7 % currency-neutral, while most of our
major competitors suffered declines. TaylorMade-adidas Golf’s progress proves
an important point – there is always room to grow even in diffi cult times. During
the year, we extended our market leadership in the critical metalwoods category
in each of our main markets. In North America, we lead our closest competitor
now by more than ten percentage points thanks to the phenomenal launch of
the Burner
® and Tour Burner ® drivers. In 2008, we have also made solid gains in
categories like balls and putters with the highly successful launch of our TP Tour
ball and the Spider family of putters which have simultaneously led to a jump in
gross margin in these categories.
I do believe the golf industry will be bumpy in 2009. Nevertheless, there is
still plenty of opportunity to gain market and mind share. In 2009, TaylorMade
will continue to leverage the terrifi c success of the Burner
® golf club line with
the launch of new Burner
® irons. Our new revolutionary R9 ™ driver has already
become the number one played driver on the European Tour in a few short weeks.
With the acquisition of Ashworth, we have supplemented our existing high-tech
performance-infused adidas Golf apparel with an authentic golf lifestyle brand.
That makes us the undisputed market leader in golf apparel globally. I’m equally
excited about the additions we have made to our already impressive list of
PGA Tour Staff professionals. We have signed seventeen new players for 2009,
providing the ultimate validation for our company’s products. With all these great
initiatives and the full support of the adidas Group, TaylorMade-adidas Golf is
fi rmly on its way to becoming the number one golf company in the world.
Are there any particular measures you will take to deal with the current macro-
economic diffi culties?
Staying competitive during this diffi cult period is of the utmost importance. And
this is a time when we must act responsibly for the good of all our stakeholders.
We alone cannot remedy the failings of the fi nancial markets nor is this our goal.
But this downturn provides a reminder that in every environment – good and
bad – we should be constantly challenging ourselves to fi nd ways to make our
business stronger.
With a Group our size, becoming faster, leaner and more effi cient is para-
mount and we are always looking for ways to create new effi ciencies. Therefore,
we already are a step ahead of the fi eld in this time of crisis. As I mentioned before,
we have implemented a joint operating model for adidas and Reebok in Europe
and Latin America. Also at brand adidas, a year ago we introduced a comprehen-
sive programme to reduce complexity and increase effi ciency in the marketing
organisation. Across the Group, we have quickly taken some very decisive
measures to improve our cost base such as cutting back on travel expenses and
external consultants, and implementing a hiring freeze. At the beginning of this
year we also reduced our workforce at Reebok and TaylorMade in the US and
announced a restructuring of Reebok’s operation in the UK.
But we will not cost-cut our way out of this crisis. I believe the real winners
of this crisis will be the ones who remain consistent with their long-term strate-
gies and don’t get too caught up in short-termism. Our focus in 2009 will therefore
be a two-way approach: Strictly reduce all types of costs that do not contribute
directly to our business success, while on the other hand investing in our future
success. Own retail and controlled space roll-out remain top of the list. We will
invest in new long-term promotion partnerships. We will continue to invest in
infrastructure projects to create future synergies. With these investments and a
tight rein on costs, our position when the economic environment rebounds will
be even stronger.
016 To Our Shareholders Interview with the CEO