Adidas Successor?

An American in Bavaria

Liedtke-PR
Mr. Liedtke, an American, has been with Adidas for 20 years.
  • Why it matters

    Why it matters

    Mr. Liedtke is said to have decisive advantages because he is American and is very familiar with the U.S. market.

  • Facts

    Facts

    • Eric Liedtke, a former football player, is seen as a possible successor to Adidas boss Herbert Hainer.
    • The 48-year-old headed the team presenting the company’s new strategy today.
    • The company is pinning its hopes on the new Ultra Boost running shoe, priced at €180 ($198).
  • Audio

    Audio

  • Pdf

Eric Liedtke had been preparing for this day for months.

On Thursday, the head of global brands at Adidas finally presented his team’s input for the sporting-goods company’s new five-year plan to catch up to arch rival Nike by increasing its brand visibility, accelerating production and collaborating with celebrities and tech companies like Google.

But Mr. Liedtke, a former professional soccer player, and his fellow board members failed to score with analysts.

“This is no more than a pretty marketing presentation,” said one financial analyst who asked not to be identified because he is not allowed to speak about individual companies. “Everybody wants to be faster and better, but the trick is to actually do it.”

“We will reinvent the company to become a role model for change in this industry.”

Herbert Hainer, Adidas Chief Executive

For Adidas, the past two years have been disastrous, with the company falling far short of the goals. Among other setbacks, it suffered a 22 percent profit loss in 2014.

Adidas shares were down 1.8 percent this morning in Germany after they had risen almost 20 percent since the beginning of this year in expectation of the strategy presentation.

The five-year business plan calls for an additional €5 billion ($5.5 billion) in sales. Chief executive Herbert Hainer said he aims to increase revenues at a high-single digit rate on average per year going forward and boost net income by 15 percent each year on average.

“We will reinvent the company to become a role model for change in this industry,” Mr. Hainer said.

Investors may need more convincing. “They made a nice announcement with targets that nearly every company in the world aims for,” said one analyst. “But they didn’t give concrete details of how they want to achieve all that.”

The new strategy involves high hopes for Adidas – and for Mr. Liedtke. He is seen as the favorite candidate to succeed the 60-year-old Mr. Hainer, who will leave his position in less than two years from now.

The athletic Mr. Liedtke, who always packs his running shoes on business trips, began his career in an advertising agency and has been with Adidas for more than 20 years.

After working for the brand with the distinctive three-stripe logo in his native United States for more than a decade, he moved to Adidas headquarters in Herzogenaurach nine years ago. Erich Stamminger, the head of global brands at the time and a close associate of Mr. Hainer, took him under his wing.

Mr. Liedtke replaced Mr. Stamminger, who left the company prematurely last spring, and is now responsible for the company’s two core brands, Adidas and Reebok.

He has just launched a worldwide advertising campaign called “Sport 15.” It’s the biggest ad campaign in years, with a budget in the triple-digit millions.

For Mr. Liedtke, the campaign is his first major performance test. He has said that “Sport 15” is more than just a campaign, but rather a “long-term investment in our brand.”

Supervisory Board Chairman Igor Landau recently announced that the board is looking at candidates inside and outside Adidas for the top spot at Europe’s largest maker of athletic shoes.

Mr. Liedtke enjoys a decisive advantage over internal rivals, such as Chief Sales Officer Roland Auschel. For one, he is American and familiar with the U.S. market. The United States, the world’s largest sporting goods market, is a top priority for Adidas, which ranks only third in the U.S. athletic clothing and footwear segment.

As part of the plan, Adidas aims to expand its e-commerce business, but also to boost visibility in U.S. cities such as New York and Los Angeles to prevent Nike from holding onto its position as industry leader indefinitely.

“If we are successful in the running field in cities such as Los Angeles and New York, then we will also be successful throughout the rest of the United States,” said Roland Auschel, who is in charge of global sales.

Other brands, such as Under Armour, are also challenging the market leaders. The Baltimore-based firm has already surpassed Adidas in the United States, where it is now the industry’s second-largest player.

Mr. Liedtke has sent Paul Gaudio from Herzogenaurach to Adidas’ U.S. headquarters in Portland to serve as director of design and development. He is also opening a design office in Brooklyn, New York, luring away three top managers from rival Nike.

“America is one of our weakest regions,” said Mr. Liedtke. “That’s why we went out and poached top executives from our competitor.”

Adidas, he added, needs to work on designs that appeal to Americans. Products that sell in the United States also do well in the rest of the world.

Despite his rapid rise to the top at Adidas, Mr. Liedtke, a former journalism major from Dayton, Ohio, makes a thoroughly unpretentious impression. He usually wears jeans, a sweatshirt and sneakers – not unlike most other Adidas employees.

Early this year, Mr. Liedtke unveiled the Ultra Boost in a presentation on Wall Street to journalists and athletes. Adidas is pinning its hopes on the new running shoe, priced at €180 ($198).

Mr. Liedtke comes across as a typically confident and combative American. “I want to win” is one of his favorite expressions.

 

Joachim Hofer covers high-tech and the IT sector for Handelsblatt, as well as the outdoor- and recreational-industry. Franziska Scheven is an editor with Handelsblatt Global Edition covering companies and markets. To contact the authors: hofer@handelsblatt.com and scheven@handelsblatt.com

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