Who Owns the Market? Adidas or Nike?

Though the majority of the population within the United States would agree that Nike is the leader in Sports and Athletic Gear, the New York Stock Exchange (NYSE) begs to differ. For the second time in a week, Nike shares have slid to a 52-week low of $51.05 per share (1.5%). Last year, Nike absolutely trampled the competition in the Dow Jones Industrial Average, especially leading up to the over $1 billion dollar lifetime sponsorship deal they made with LeBron James. Even after Under Armour beat out Nike to sign a 10-year deal with Under Armour.  While the overall market is up 3 percent, Nike shares are nearly down 22 percent.

So who is the industry’s new leader, OUTDOING Nike?

The original Adi Dazzlers.

Adidas shares are up a whopping 85 percent this year thanks to the extensive product lines that have not only proved high quality in the athletic and training world, but also in the fashion world. As the fashion world has shifted towards the “athleisure” trend, Adidas capitalized and turned their athletic wear, everyday wear – mainly promoting the Adidas Superstar collection.

Alongside the high quality sports wear that can be doubled has fashionable street-wear, Adidas stepped outside the athletic sponsorship world and partnered with superstar musician, Kanye West to create a whole new line out of Adidas – Yeezy. Everything West has designed has sold out in minutes, which has only shown to be a profit monster for Adidas.

But could this potentially turn out poorly for Adidas?

West is notorious for speaking his mind, no matter what situation. The phrase “there is a time and a place for everything” does not seem to resonate for the designer/rapper. He is definitely a potentially risky investment. Thus far, there has not been a downfall, but the second Taylor Swift wins another award over Beyoncé, the partnership (and the stock value) could begin to landslide. The tie of the Yeezy brand to the Kardashian name will also play the test of time as to it’s impact on the success of Yeezy.

Eric Liedtke, Chief Marketing Officer of Adidas was asked if he was concerned about Kanye’s behavior and he answered with a simple “No”. Liedtke said that the company is “excited and honored to build on this partnership, and eagerly look forward to defining the future together”.

Alongside Yeezy being an incredible extension of the Adidas brand, there are potential plans for brick and mortar Yeezy locations.  Although, the “Jordan’s” extension of Nike was massive, Jordan store were never brick and mortar.

So the question is: has Adidas figured out the way to pave the road of ultimate success in the “athleisure” industry? Creating an extremely successful brand that is recognized on the highest level both within the United States and internationally, has boosted the Adidas name to a whole new level.

Will the extension away from solely sports wear harm or improve the Adidas brand?

Will Adidas finally claim the top tier of success in the industry?

Will Nike, Under Amour, Puma, and other competitors begin to see the pattern and create their own brand extensions?

Only time and the DOW will be able to tell.

Written by Grace Bowes www.linkedin.com/in/gracebowes

General Editor: Macy Marin

Sources:

http://www.forbes.com/sites/hughmcintyre/2016/06/30/is-adidas-new-partnership-with-kanye-west-dangerous/#c1d896f28205

http://fortune.com/2016/08/04/adidas-outperforming-nike-ua/

http://www.forbes.com/sites/jasonbelzer/2016/06/29/adidas-all-in-for-yeezy-with-new-groundbreaking-kanye-west-partnership/#4e5f4367966a

http://www.slideshare.net/neemapriyesh0703/nike-vs-adidas-34470456

 

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