Adidas is banking on the hottest trend in sportswear to defy the American curse that's haunting Nike and Under Armour

pulse

March 14, 2018 8:43 PM

Adidas has conquered sneakers, and now it's headed for training apparel.

During an earnings call on Wednesday,
This growth has largely been based on its running and Originals shoe brands, which have a variety of popular models.

There's no stopping Adidas. The German sportswear brand said in an earnings call Wednesday that its revenues were up 35% in North America in 2017.

King said the success was due to "investment in the right things" as Adidas has focused on its most important categories — vintage-inspired Originals, training apparel, running, basketball, and what the brand calls its "core" products — and becomes more ingrained in US sports.

Running is still Adidas' biggest category, but King said it's seeing "real momentum" in training apparel, which he called Adidas' "biggest opportunity." Training is now the brand's number-two category.

Sportswear all starts with the sneakers, and it grows into apparel as the brand raises its profile and cachet in the US.

Most of Adidas' growth has started from the fashion side, and now King expects that will translate into sales for things like equipment and football cleats. This mirrors how customers now buy their clothing and sports equipment, starting with casual wear and fashion, and then going more technical as customers strive to live healthier lives.

"Adidas is positioned better than anyone in this," King said.

In the meantime, Adidas' two biggest competitors in the US — Nike and Under Armour — have stumbled in the North American market in recent quarters.

King warned that 2018 might be see similarly rapid growth numbers, and that there could be a "normalizing" in the growth numbers Adidas posts next year. But this is all in the name of getting to a sustainable level of growth as Adidas pushes the envelope on market share.

King estimates the brand now has about 10% market share in the US, up from 3.5% just a few years ago.

"We believe we should be at 15% market share," King said.

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