In a recent town hall meeting, Bjorn Gulden, the CEO of Adidas, took a bold step towards fostering transparency by sharing his mobile number with approximately 60,000 employees. This move, as reported by the Wall Street Journal, reflects Gulden’s commitment to open communication and his vision to transform the company culture. A former professional football player and former leader of rival brand Puma for nine years, Gulden aims to reshape Adidas by providing direct accessibility to himself for the staff. He emphasized the need to address a prevailing ‘culture of finding reasons not to do things’ within the company, signaling his determination to bring about positive change.
The German sports giant was struggling when Mr Gulden, a former professional football player, took over as CEO in January 2023. It was just a few months after Adidas severed its partnership with rapper Kanye West, known as Ye, following the latter’s anti-Semitic comments and criticism of the Black Lives Matter movement. This sparked outrage among the public and jeopardized the reputation of the brand. It was also grappling with slowing sales in China and higher inflation across Western markets. In addition, the company’s inventory write-offs after Ye’s departure and one-off costs related to the COVID-19 virus had hurt earnings.
These issues made it harder for Adidas to catch up with Nike, its top competitor in the market, which is more than doubling its market share every decade. It was daunting when Mr Gulden stepped in to turn things around.
As part of his revamping efforts, he has streamlined communications at the top of the business so that he gets direct reports from department heads. He has also binned a laborious evaluation practice used for years and instead is looking at more agile ways to measure performance. In addition, he has increased focus on bringing in new talent to the firm and trying to promote women and minorities within the company.
Nevertheless, the company must catch up to Nike regarding revenue and profits. This is partly due to its weaker presence in the United States, where the top-selling basketball sneakers are made by rival Nike, which enjoys a stranglehold on the market. The brand has been trying to make up for this by focusing on soccer and other sports that enjoy popularity in Europe.
However, a lack of attention to the basketball category will likely hurt it in the long run, especially with Nike expanding its countrywide footprint. Meanwhile, its other shoes and apparel lines have grown little in recent years. The brand’s North American revenues have dipped by over $12 billion since 2013, while its overall revenue has grown by just over $5 billion. This indicates that the company’s strategy needs to be tweaked to catch up with its rivals. It could do well to focus more on basketball and other popular sports in the US, where it has the potential to grow significantly.
