Adidas 2002 Annual Report Download - page 78

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76 REPORTING MANAGEMENT DISCUSSION & ANALYSIS /// adidas DEVELOPMENT IN EUROPE
adidas DEVELOPMENT IN EUROPE
adidas BRAND SALES GROW 4% IN EUROPE /// Sales for
brand adidas in Europe increased 4% from € 2.6 billion in
2001 to € 2.7 billion in 2002. On a currency-neutral basis,
sales grew 4%. The strongest gains came from Italy, where
sales grew nearly 20%, on the heels of a new business model,
following the Group’s purchase of the remaining shares of
adidas Italy. Solid gains were also recorded in the UK, Spain
and France. In Central Europe, in particular Germany, sales
declined in 2002 although performance improved in the
second half of the year. In the Emerging Markets, which
comprise our activities in Eastern Europe and Africa, rev-
enues continued to grow at double-digit rates, with particu-
larly strong gains in Russia. Increased key account activity
and adidas own-retail activities also drove positive top-line
growth.
FOOTWEAR SALES IN EUROPE UP 7% /// On a product cate-
gory basis, adidas sales in Europe increased most signifi-
cantly in footwear, up 7% from € 1.2 billion in 2001 to
€ 1.3 billion in 2002. On a currency-neutral basis, this
increase was 8%. Growth drivers were the Sport Heritage
division, where sales rose 17% year-over-year, and the Sport
Performance categories football and running, which grew
22% and 8% respectively. This growth correlates strongly to
the Group’s strong marketing activities around the 2002
FIFA World Cup™ and the introduction of the ClimaCool®
and a3® running technologies. Sales of tennis and training
footwear declined as a result of lower tennis participation in
countries such as Germany, Spain and Italy and due to a
general shift from training to running footwear purchases
among consumers.
adidas APPAREL SALES IN EUROPE NEAR STABLE THANKS
TO STRONG WORLD CUP INITIATIVES /// European apparel
sales were stable at € 1.3 billion in 2002. On a currency-
neutral basis, this was a decrease of 1%. Football apparel
delivered strong growth, with sales increasing 27% year-over-
year reflecting Europe’s World Cup fever. Double-digit sales
gains were also recorded in the basketball category, albeit
from a very small base. Sport Heritage apparel also got off
to a strong start in Europe, the category’s most important
region. These improvements, however, were offset by a
decline in Sport Performance training apparel, which
although down 7% versus the prior year was significantly
better than the overall market development in the category.
OWN-RETAIL ACTIVITIES AND LOWER CLEARANCE SALES
HELP adidas GROSS MARGIN IN EUROPE /// The adidas
gross margin in Europe was 40.0%, up 2.0 percentage points
versus 2001 when the gross margin was 38.0%. The main
drivers of this improvement are lower clearance sales,
higher price points and increased own-retail activities in
Europe. In addition, the improving product mix also helped
margin development in the region.
adidas COLOURS ///
HALTERTOP