5 Things Adidas Wants to Change in the U.S.

Reported by WSJ

Adidas AG is the world’s No. 2 sportswear maker by sales, after Nike Inc. But for years, the German company’s U.S.-market position has eroded, falling to third behind Nike and Under Armour Inc. last year. Adidas has appointed an American, Mark King, to head its North American division and fix the problem, The Wall Street Journal reports.

Here’s what to know about the changes Mr. King plans:

1 Empower U.S. executives

Some U.S. retailers have said Adidas is out of touch with the American consumer. Last fall, Adidas decided to give more authority to its executives in Portland, Ore. Branding and product creation for most products sold in the U.S. will originate here–something that hasn’t happened before, Mr. King says. It’s “a very different mindset from Germany,” he says. “That’s really the epiphany.”

2 Speed up

It’s a problem facing all apparel makers: Consumer fashion tastes change quickly; manufacturers struggle to keep up. Adidas’ product cycle—the time from drawing board to market—is about 18 months. Current trends suggest that’s too long. At Foot Locker, for example, demand for the Adidas Tiro pant was hot last fall, but by March was slowing as new offerings from Nike gained traction, says Ken Hicks, the chain’s executive chairman. Mr. King says Adidas is working to shorten the cycle to no more than six months.

3 Get into more stores

By 2014′s end, Adidas and its Reebok unit held market share of 7.1% in sports footwear and 4.6% in sport apparel, according to Sterne Agee and SportScanInfo (vs. Nike’s 45% in footwear and 29% in apparel). Adidas wants to work with retailers to improve its display and assortment in stores, Mr. King says. It is working, for example, on an expanded rollout of products at Dick’s Sporting Goods stores over 2015.

4 Emphasize American sports

Adidas’s primary strategy until recently: Win the top soccer spot in every market and the rest would follow, Mr. King says. That doesn’t work in the U.S., where soccer doesn’t set trends. Adidas’s U.S. executives have won funding to sponsor up to 500 National Football League and Major League Baseball players over the next few years, up from a few dozen today. “I know we’re a soccer brand globally,” Mr. King says, “but in the U.S. we have to be about U.S. sport.”

5 Reflect American tastes

This year, Adidas introduced a much-anticipated sneaker, the Yeezy Boost, designed with rapper Kanye West. The initial run sold out–a limited release of 9,000 pairs. It’s the start of what Adidas hopes will be a broader effort to bring more American flavor to its products. Adidas also plans a Brooklyn design studio helmed by designers lured from Nike.