SHANGHAI — Adidas chief executive officer Herbert Hainer said Monday the athletic goods group expects to continue posting double-digit sales growth in China each year through 2015.
This story first appeared in the February 21, 2012 issue of WWD. Subscribe Today.
While declining to disclose figures ahead of the March 7 release of 2011 full-year results, Hainer, in town to visit a new three-story flagship in the city’s central shopping district, highlighted the importance of the region in Adidas Group’s development. The Greater China market was the company’s most successful in the first nine months of 2011, with sales rising 28 percent to $1.183 billion.
Hainer promised that the 2011 numbers would show a record year in China, as the group passed the $1.31 billion mark in revenues in China. “Five years ago I said we want to achieve $1.31 billion in 2010 in China and then, obviously because of the economic crisis in 2009, we are a little bit postponed but still on our way what we long-term wanted to achieve here,” he said.
Hainer reiterated Adidas Group’s plans to continue focusing on the Greater China market, aiming for double-digit sales growth annually until 2015. The company expects that 50 percent of its profits will come from markets in North America, Greater China and Russia/Commonwealth of Independent States by 2015. The brand has been expanding in Greater China, Hainer said, with the addition of 1,175 stores in 2011, expanding its presence into 115 new cities.
Expansion is happening at a slower rate in southern China than the rest of the region, but Adidas Greater China managing director Colin Currie stressed the importance of that geographic area.
“We’re opening everywhere,” Currie said, adding that two-thirds of the group’s opportunities will be in lower-tier cities.
“We are segmenting our offering in a wider range in China than we do in the rest of the world,” said Hainer, pointing to the group’s opening of children’s stores and a shop dedicated to basketball in Wuhan, China. Adidas has opened more than 500 kid’s stores in China, more than any of its other markets.
“All I have seen in the last few days has encouraged me to further invest in the China market. Because I think the potential is still unheard of, there is still so much more that we can do here in China. This will mean that we will put the right investment behind and also our retail partners will put their money behind our further development,” he said.
The opening of the three-story flagship was certainly a part of these expansion plans. Opened in late January, the store boasts three floors of Adidas brand athletic and sports casual clothing and accessories, including the group’s fashion-forward Stella McCartney collection for its Neo fashion brand.
Adidas confirmed that investment in the Neo brand will increase in 2012 through marketing and expansion in China. Hainer said Adidas will continue investment into its own stores, new infrastructure and invest in improving software and warehousing to faster replenish stores. He also said that there would be a hiring push in China and a move into new offices in a few weeks.
The Greater China market is the second largest market for Adidas, after North America.