NEW YORK — Adidas-Salomon AG’s decision to build a giant flagship in the heart of SoHo here signifies the athletic company’s commitment to growing its American business.
The store, its largest worldwide, also indicates the company is taking a flashy approach. Even though the 30,000-square-foot store primarily sells sports and performance products, it’s located in the midst of one of New York’s busiest and most fashionable districts. North America now accounts for 23 percent of Adidas’ overall sales and is critical to the company’s long-term success.
Adidas is seeing clear signs of a turnaround in its U.S. business, after years of sluggish sales in America, as it seeks to gain ground on Nike.
Spurred by a strong management team, consumer acceptance of new and technologically advanced products and increased marketing, the U.S. is seeing sales increases and is poised for additional growth, Herbert Hainer, chairman and chief executive officer of Adidas-Salomon AG, said in an interview here.
“We are making progress in the U.S.,” Hainer said. “It’s hard work and it’s not magic. But we believe we are building for the future and are working in all the different areas that we need to improve our business, including products, distribution and communications.”
North American sales rose 15 percent to $496.1 million in the recent first quarter, and marked the fourth straight quarter of currency-neutral growth here, said Erich Stamminger, president and ceo of Adidas America, who also heads global marketing.
Adidas is the world’s second-largest athletic company after Nike and had total annual sales of $8.3 billion in 2004, with figures converted from the euro at current exchange rates.
Hainer and Stamminger were in town last week to unveil the 30,000-square-foot Adidas performance store here on the corner of Broadway and Houston Street. At a press conference prior to the store opening, Hainer spoke about the company’s recent decision to shed its Salomon outdoor division, and its growth prospects in the U.S. and around the world. As reported, the company turned in strong first-quarter results last week and is in a solid financial position, with shrinking debt and improved gross margins. Adidas also said it would sell Salomon for about $624 million to Finnish firm Amer Sports Corp. in order to better focus on its core business.
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