By Marc Bain
In 2011, Adidas made a bold decision: to stop releasing one of its classic sneakers, the Stan Smith.
The
plan was to clean out the marketplace. Lack of supply would create
pent-up consumer demand, which Adidas meant to stoke slowly with
hard-to-get releases before officially reintroducing the shoes. It did
that in 2014, and just as expected, the Stan Smith blew up. “We knew
three and a half years before we did step one what would happen,” Adidas
marketing VP Jon Wexler told the Guardian in 2015.
The Stan Smith and another retro sneaker, the Superstar, have been major forces in Adidas’s stunning revival over the past few years. The brand continues to grow, including in the important North American market, where sales rose 16% (pdf)
in the second quarter. Yet for the past 18 months, Adidas has been
pulling back distribution of the two sneakers, CEO Kasper Rorsted told
investors during an earnings call Thursday (Aug. 9).
Sales of Stan Smiths and Superstars
have long been cooling in certain markets. But Rorsted said there is
actually more demand than Adidas wants to satisfy; the company is
thinking long-term about its “brand integrity.” If in two or three
years, the shoes’ popularity rises again, Adidas can hike up
distribution. Rorsted called it an example of “disciplined life-cycle
management.”
(Intriguingly, he
also suggested that Adidas would soon scale up the availability of its
Yeezy sneakers made in collaboration with Kanye West, but didn’t provide
details.)
Much of the sneaker
business—and fashion generally—relies on scarcity. It’s a lesson that
was recently reinforced at Nike: When the company put more Jordan
sneakers on the market, hoping to boost sales, the brand lost its
exclusivity and shoppers lost interest. Nike is now pulling back on distribution to make Jordans scarce again.
Adidas
has launched—and carefully distributed—new styles that are more than
making up for the pullback on Stan Smiths and Superstars. Its
three-year-old Ultra Boost franchise grew nearly 50% last quarter,
Rorsted said, and remains a “long way from being saturated.” The Solar
running line is growing, and the P.O.D. franchise is expected to be one
of the highlights of this year. Adidas is also capitalizing on the
demand for 1980s and 1990s looks with the Continental 80, the Yung 1,
and Falcon.
At this point, Adidas doesn’t have just one or two burning-hot styles
fueling growth. It has a slow burn going under a broad base of sneakers
(and regions—sales in greater China rose 27%). To keep its brand hot,
Adidas knows how to stay cool.
#3Stripes2Soles1Love
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