Adidas under new CEO: challenges and future prospects

Adidas reports second quarter sales at previous year’s level

In Handelsblatt, Axel Höpner explains the challenges and future prospects of Adidas based on the sporting goods group’s quarterly results. In an interview with Handelsblatt, Atreus Director Michael Lichtinger assesses how promising Adidas CEO Gulden’s first steps are.

Sporting goods group Adidas is experiencing a period of change under new CEO Björn Gulden, which will unfold more strongly in the coming years. Despite better-than-expected second-quarter numbers, the true effect of Gulden’s strategy changes remains to be seen. Gulden stresses that short-term results are not the main goal for 2023. Rather, he wants to lay the groundwork for a successful company in the years ahead.

Challenges and progress:

1. Challenges in the “Yeezy” cooperation:

A key problem that Gulden addressed was dealing with the remaining stocks of Yeezy products from the halted cooperation with US scandal rapper Kanye West. The sale of these products was successful, and thus the group’s situation was stabilized. Expert Michael Lichtinger from management consultancy Atreus emphasizes that these actions helped to support sales and send a positive signal.

2. Product development and brand strength:

Gulden is focusing on vintage and originals models from Adidas’ history to make the brand more attractive. Adidas products are to be given a renewed focus, especially in the area of performance products such as high-quality running shoes and soccer shoes. The brand strength and the so-called “brand heat” must be strengthened in order to achieve sustainably higher sales.

3. restructuring of top management:

The reorganization of the Board of Management has been dragging on for a long time, and it is not clear whether it has been completed yet. Lichtinger expects that the changes at the management level could take time, but they also offer the opportunity to realign Adidas’ strategic focus.

4. Investors give time:

Despite mixed quarterly figures, investors are convinced that Gulden can steer the company step by step in the right direction. The challenges are seen as long-term processes, and the positive development of Adidas’ share price this year shows investors’ confidence in Gulden’s leadership.

Outlook and conclusions:

The transformation and strategy changes at Adidas under the leadership of CEO Björn Gulden are a gradual process that will take time to fully unfold. Addressing the challenges related to the Yeezy collaboration, strengthening the brand and realigning the top leadership are important steps on the way to a successful future. Investors are showing confidence in Gulden’s long-term vision and the actions taken. The sporting goods market may be difficult at the moment, but with the right strategy and staying power, Adidas could emerge stronger.

Source: Handelsblatt, August 3, 2023 – Axel Höpner