Adidas Falls As “Superstar’s” Go Out of Style

By CultureBanx Team

  • Adidas cut its 2018 revenue forecast

  • Yeezy Boost shoe sales and margins were above Adidas expectations

Sportswear titan Adidas (ADS.DE +1.44%) is struggling with lagging sales, after betting big on style icons while scaling back on athletes to help push its products. Have they been relying too heavily on fashion and not enough on actual sports, during a time when urban culture continues to be sewn into corporate strategy?

Why This Matters: The company cut its 2018 revenue forecast after third quarter sales fell in western Europe. Adidas was hit by changing fashions and Nike’s (NKE -1.83%) gains in soccer during the World Cup. CEO Kasper Rorsted noted they relied too much on shoes like its retro Stan Smith and Superstar that have fallen out of fashion.

CEO Kasper Rorsted noted they relied too much on shoes like its retro Stan Smith and Superstar that have fallen out of fashion

Adidas saw the September launch of Yeezy Boost shoes designed by rapper Kanye West drive traffic to its website. The sales and margins of the new shoe styles were above the company’s expectations.

Maybe Adidas biggest problem isn’t about focusing on fashion over sports but more so the marketing push behind them. The influencer market is valued at $1.07 billion and is expected to more than double to $2.38 billion in 2019. Influencer marketing firm Mediakix notes video marketing can be twice as effective in driving sales, and those influenced by video, tend to be active shoppers as well.

Situational Awareness: The German sportswear company has been making strides in North America with sales up 16% in its most recent quarter, cutting into Nike’s grip on the U.S. market. E-commerce sales in the region were up 76%, and they’ve been able to attain higher margins than in stores.

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