Tuesday
Nov092010

Gold Standard: Nike Digging In For 2012 Olympic Battle Vs. Adidas

By Barry Janoff, Executive Editor

Interior view of the remodeled NikeTown in London, now the largest one in world.November 8, 2010: The Summer Olympics in London is more than 20 months away, but that is just a blip in the time-space continuum for rivals Nike and adidas, companies that use global events such as the Olympics and FIFA World Cup to emphasize their hate-hate relationship.

During the 2008 Summer Games in Beijing, the intense struggle reached epic proportions: adidas claimed it was opening two new stores per day in China, while Nike said its growth in the country would make China its second-largest marketing in the world behind the U.S.

Now, with July 2012 approaching, the confrontation continues. Adidas is the official sportswear partner of the London Organizing Committee for the Olympic Games, meaning that it has exclusive category rights for marketing and logos, and will supply apparel not only to athletes but also to staff volunteers and officials, among others. In addition, the company has adidas Originals Stores located in such high-traffic places as Covent Garden and Soho. Among the arsenal of British athletes and celebrities at its disposal is David Beckham and Stella McCartney, the company's official designer for the 2012 Games. McCartney will also be outfitting the entire British Olympic team, which means major TV time throughout the host nation.

Nike is an official marketing partner of the U.S. Olympic Committee, which guarantees significant TV exposure in the U.S,. especially during such events as the basketball tournament. Among the NBA stars who said they would seek a spot on the USA Basketball roster are Kobe Bryant, LeBron James, Carmelo Anthony, Kevin Durant and Chris Paul, all of whom also already endorse Nike or Nike division Jordan Brand.

Although not a part of the Olympics, the NFL has played its annual International Series games in London for the past few years. In 2012, to coincide with the Olympics, Nike will replace adidas division Reebok as the league's official uniform provider, giving the company even more exposure among local consumers.

David Beckham is among the A-Listers who will bring adidas' London 2012 Olympic message to life.During a financial presentation to analysts and media on Nov. 8, adidas CEO Herbert Hainer, said that Nike was it's primary target in a strategy to grow sales to $24 billion by 2015, nearly a $10 billion increase from reported sales of $14.6 billion in 2009. Adidas said that "key growth markets" include North America and Britain, as well as  China, Russia/CIS, Latin America, Japan and India. "Our aspirations are to outperform total market growth . . . to outgrow our major competitor," said Hainer. "[We want to] have the bottom line grow faster than the top line."

Nike recently reported sales of $19 billion in its year to May 2010, and said its goal is to reach $27 billion in sales by 2015.

In the Olympic battlefield, the latest salvo came on Nov. 8 when Nike reopened its flagship Niketown store on Oxford Circus in central London following "extensive redevelopment." The company said that this is now "the largest Nike store in the world." Niketown London now covers approximately 42,000 square feet over four floors.

Other existing Nike stores in London include locations in major shopping malls Westfield and Bluewater, in addition to such single-category locations as the Nike running store in Covent Garden that opened in October.

"Our aspirations are to outperform total market growth . . . to outgrow our major competitor." — Herbert Hainer, adidas CEO

At the company’s investor meeting earlier this year in New York, executives detailed plans to open 250-300 Nike-branded stores (a mix of branded stores and factory outlet stores) worldwide over the next five years.

According to Marc van Pappelendam, general manager, Nike UK Ltd., “Nike is committed to offering consumers access to engaging, exciting and innovative retail spaces. The re-launch of our flagship Niketown London store demonstrates our drive to continue to raise our game and offer our consumers world-class shopping experiences in line with our long-term category strategy.”

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