Adidas (OTCMKTS: ADDDF) has formulated a five-year plan to compete with rival Nike and increase profitability amid doubling its e-commerce sales by 2025. An investment of USD1.9 Billion will be utilized to digitise key factors within the value chain including creative, sourcing and sales.
The new ‘Own the Game’ strategy announced today, strives to raise sales by 8-10% per year over the next four years, with 2021 as the foundation. Gross margin is predicted to rise between 53-55%, meanwhile net income for operations is expected to grow between 16-18% annually.
The company revealed it has managed to reopen 95% of its locations post coronavirus lockdowns. Shares rose 3.2% today on the German blue-chip index.
With the newfound strategy, Adidas plans to deviate towards a direct-to-consumer (DTC) led business which will generate over 80% of growth. About 95% of sales growth is anticipated to come from the following categories: football, running, training, outdoor, and lifestyle.
Adidas will be targeting Greater China, EMEA (Europe, Middle East, and Africa) as well as North America. The three strategic markets are proposed to bring in 90% of the sales surge to 2025.
“‘Own the Game’ is a growth and investment strategy, which will lead Adidas into a successful future,” says Adidas CEO Kasper Rorsted. “Our strategy is deeply rooted in sport, puts the consumer at the heart of everything we do, and is brought to life by our people. Our strategic focus is on increasing credibility of the Adidas brand, elevating the experience for our consumers and pushing the boundaries in sustainability.”