At the Olympic Games, adidas seeks dominance in new sports. By Reuters

© Reuters. The Adidas logo is seen at the unveiling of the new Futurecraft shoes in New York, New York, USA on April 6, 2017. REUTERS/Joe Penney/File Photo/File Photo

helen reed

HERZOGENAURACH, Germany (Reuters) – As sportswear rivals vie for a spot ahead of next year’s Paris Olympics, Adidas (OTC:) aims to put its brand on the map for smaller events such as breaking, climbing, skateboarding and BMX. I am doing it.

Adidas CEO Bjorn Gulden is looking to reboot its image after a high-profile fallout with Ye, the artist formerly known as Kanye West, ended the company’s highly profitable Yeezy shoe line.

And the Olympics are a mainstay for global sports apparel giants, who sponsor athletes, sports federations and national teams and spend millions marketing the event.

Shifting back to sports rather than celebrities is a key part of Gulden’s game plan to turn around the company’s fortunes when he takes over as CEO of Adidas in early 2023. This is a tactic that will face its biggest international test at Paris 2024.

“For whatever reason, the old strategy here has been to focus more deeply on fewer sports, but I’m doing the opposite. I want Adidas to get back into the smaller sports and stand out,” he said.

“Focusing only on the four or five biggest sports is, first of all, too easy and, frankly, foolish,” he added in an interview at Adidas headquarters in Herzogenaurach, Germany.

A successful Olympics is essential for Adidas to regain the market share it has lost to rivals over the past four years and reward investors pinning their hopes on Gulden.

Shares of Adidas, the second-largest sportswear group by global market share, have risen more than 50% so far this year. Nike (NYSE:) and Puma have suffered losses for the second year in a row.

Adidas’ main focus is still on large-scale Olympic sports such as track and field, but work on more niche areas expands the design team and generates ideas for more mainstream products such as sneakers, Gulden said.

Breaking, which originates in hip-hop, also has streetwear and lifestyle appeal and offers an opportunity to reach new audiences in key markets such as China, where the latest Olympic sports are popular, Gulden said.

Adidas recruited China’s Liu Qingyi, known as ‘B-Girl 671’, the world’s No. 1 female breaker, in June, but competition is fierce.

Nike is the official sponsor of the American, Japanese and Korean breaking federations and has signed 20 athletes, it told Reuters. Puma recently signed Chinese player Qi Xiangyu.

Performance

In an effort to attract young people to the Olympics, climbing, skateboarding and BMX freestyle, which made their Olympic debut in Tokyo in 2021, will also be featured in Paris.

It’s hard to say how much the Olympics drive sportswear sales, but they help brands build a reputation for “performance” products used by elite-level athletes.

Athletes who have signed with Adidas this year include BMX rider Kieran Reilly, the Brazilian Skateboarding Federation and the Polish Olympic Committee, but Gulden said Adidas’ presence in Paris is limited because the Olympic sponsorship deal lasts several years. He said it wouldn’t be as wide as he wanted.

“The Olympics are important for these brands in terms of demonstrating their skills across all sports,” said Boris Radondy, who invests in sports companies at French asset manager DNCA.

“If these brands forget that they are a sports brand, customers will leave. You can’t just pursue lifestyle,” he added.

Puma focuses primarily on athletics and has already invested heavily as the official sponsor of the Jamaica Olympic Association, including signing Usain Bolt when he was 16 years old.

“We still have to focus on gaining market share in this space,” Richard Teyssier, Puma’s global brand and marketing director, told Reuters.

Puma has recruited 35 new athletes this year across the javelin throw, long jump and 10,000 meters track and field events.

“It’s very important for them to compete in track and field events, and in the past they have chosen the best athletes,” said Radondy, whose fund holds Puma shares.

Adidas, which is about three times the size of Puma in terms of sales, can afford to spend money on more athletes and more sports in the Olympics. As a result, Nike may far surpass Adidas.

But Kerryn Foster, adidas’ head of professional sports, said: “We continue to invest more and more heavily as a company in the Olympics, not only in the event but also in the run-up to it.”

There will be hope for shareholders who backed Gulden that his new approach to Adidas could provide gold.