Adidas risks being overtaken by rivals Puma despite lucrative boot deals with Lionel Messi, Mo Salah and Paul Pogba… as German sportswear brand posts first annual loss in 30 years after collaboration failed with Kanye West.
- German sportswear brand Adidas faces its first annual loss in 30 years
- This is because the company has £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 a £450m loss.
The German sportswear brand is facing the post of its first annual loss in 30 years due to a failed collaboration with rapper formerly known as Kanye West and has them with £1.1bn of unsold shares.
Adidas declared on Wednesday that it will cut dividends to shareholders as they ponder how to deal with unsold ‘Yeezy’ merchandise.
If they choose to cancel the products, it could see the company’s operating profit cut by £446m.
Nike and Adidas are widely recognized as the two brands with the greatest presence and influence in world soccer.
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 contract with Adidas
Adidas is at risk of being overtaken by Puma after its failed collaboration with rapper formerly known as Kanye West
Lionel Messi, Mohamed Salah and Paul Pogba are among the high-profile players who have boot deals with Adidas, while also supplying Manchester United’s kit in a deal worth £750m.
However, Puma has become a great rival to Adidas and Nike in recent years. They confirmed Jack Grealish as their latest acquisition earlier this week and also sponsor Neymar. Puma’s contract with Manchester City is worth £650 million.
Indeed, Adidas has been warned that they could relinquish their place alongside Nike at the top of the football marketing pyramid if they reduce their investment in the game as a result of potential financial losses.
“If they start to lose their mid-market players, companies like Puma, who will suck up talent and get a bigger market share that Adidas won’t want,” said Ben Peppi, head of sports services at JMW Solicitors.
“Usually advertising and marketing is where companies would look to cut, but football is very important to Adidas.
‘Perhaps they will have to be more frugal and selective in how and where to invest and rethink their strategy, but they will not want to give up their market share.
“They will want to continue to invest in football because it could be more damaging if they don’t.”