Thursday, April 22, 2021

What is the German “Adidas” betting to increase its sales after “Corona”?

Last year, Adidas CEO Casper Rorsted likened the impact of the pandemic on the company’s business to a halftime break at a soccer match. Pointing out that business will return to its course after a time out.

Indeed, the sportswear company recently confirmed the resumption of its activity and announced the return of its business to grow, which was recorded in the last three months of 2020, and it has set ambitious targets for sales and profits until 2025, in a direction confident by it that we will need more sports clothes and equipment For home exercise, such as those offered by companies such as Peloton, yoga classes held through the Zoom program, as well as our need to wear sportswear when going to gyms and to attend activities when they open.

Adidas’ new strategic plan, dubbed “Be the King of the Game”, assumes that the significant increase in spending over the past year on health, fitness, and well-being will continue vigorously and that the company must exploit this trend and secure a stake in it.

It is not impossible, of course, as investors have already started giving the company a chance. Its shares have risen by up to 8.6% recently, but of course, in the markets, there are no guarantees.

People will not stop exercising once they return to a normal life. But it is difficult to imagine the same great rush to equip homes and exercise indoors.

In fact, Diks Sporting Goods, a company that sells equipment, clothing, and sneakers, recently indicated that after a massive epidemic year, sales growth in 2021 could falter.

Adidas expects that after a year of staying indoors, people will continue to prioritize comfort over style. But the truth is, people are more likely to ditch the gym pants. In my view, fashion often revolts against prevailing conditions.

Despite the current trend towards more casual wear, the post-pandemic economy could attract more attention to dressing up, and formal wear after a year of “pajamas.”

The company, “Urban Outfitters” has said recently, that it is witnessing more interest in dresses and other clothes, and this means that the company “Adidas” will have to work hard to achieve its goals. It is currently focusing on the right mechanisms; It is currently investing one billion euros (1.2 billion dollars) in e-commerce, with the aim of doubling online sales, to 8 or 9 billion euros, by 2025.

It is also focused on achieving sustainability and aims to make nine out of 10 of its products green in the same time period. In addition, Adidas is working to promote women’s clothing and move towards producing sportswear that looks beautiful outside sports clubs. This is a smart move, given that “sports” fashion will account for 50% of the growth of the sporting goods industry through 2025.

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