Adidas risk being overtaken by rivals Puma despite having lucrative boot deals with Lionel Messi, Mo Salah and Paul Pogba… as German sportswear brand face posting their first annual loss in 30 years following a failed collaboration with Kanye West
- German sportswear brand Adidas face posting their first annual loss in 30 years
- This is due to the company having £1.1bn of unsold ‘Yeezy’ merchandise
- They have been warned that Puma could overtake them in the near future
Adidas have been warned they risk being overtaken by Puma in the race for supremacy in football’s lucrative sponsorship market as they face losing £450million.
The German sportswear brand face posting their first annual loss in 30 years due to a failed collaboration with the rapper formerly known as Kanye West has them with £1.1billion of unsold stock.
Adidas stated on Wednesday that it will reduce dividends to shareholders as they ponder how to deal with the unsold ‘Yeezy’ merchandise.
If they choose to write off the products it could lead to the company’s operating profit being lowered by £446million.
Nike and Adidas are widely recognised as the two brands with the biggest presence and influence in world football.
Seven-time Ballon d’Or winner Lionel Messi has a lucrative boot deal with Adidas
Mohamed Salah is another high-profile player who has a boot deal with Adidas
Adidas risk being overtaken by Puma following their failed collaboration with the rapper formerly known as Kanye West
Lionel Messi, Mohamed Salah and Paul Pogba are among the high profile players who hold boot deals with Adidas, while they also provide Manchester United’s kit in a deal that’s worth £750million.
However, Puma have emerged as a major rival to Adidas and Nike in recent years. They confirmed Jack Grealish as their latest acquisition earlier this week while they also sponsor Neymar. Puma’s kit deal with Manchester City is worth £650m.
Indeed, Adidas have been warned that they could relinquish their place next to Nike at the top of the football marketing pyramid if they are reduce their investment in the game as result of potential financial losses.
‘If they start losing their mid-market players, companies like Puma who will hoover up the talent and gain a bigger market share which Adidas won’t want,’ explained Ben Peppi, head of sports services at JMW Solicitors.
‘Typically advertising and marketing is where companies would look to cut back, but football is so important to Adidas.
‘They will, perhaps, have to be more frugal and selective in how and where invest and rethink their strategy – but they won’t want to give their market share away.
‘They will want to continue investing in football because it could more detrimental if they don’t.’
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