Three legendary stripes: why Adidas is losing ground in Russia

© Flickr / Thomas Frost Apapcodeine AdidasThree legendary stripes: why Adidas is losing ground in Russia© Flickr / Thomas Frost Jensen

MOSCOW, November 18 — RIA Novosti, Natalia Dembinski. The Adidas Group is one of the world’s largest manufacturers of sporting goods — by the end of 2017 will close 200 stores in Russia. The company had previously planned to limit the closure of 160 retail outlets, but their number had to increase. This decision is connected with the difficult economic situation in the country, said the German manufacturer. Observers, however, point to the fact that the culprit not only falling demand, but bad crisis management, as well as opposition competitors in the United States. About why one of the most popular sports brands in the former Soviet Union reduces its presence in more recently, the largest it market in the material RIA Novosti.

Back in the USSR

A little more — and a company could in a big way to celebrate 40-year anniversary on the Russian market. Triumphant ascent began with the Olympics-80 in Moscow, when the Soviet Politburo decided to equip Olympians form the German brand.

A year later the company got rid of another 80 stores and cut 10% of staff, explaining that adapts the structure of the Russian units to the extent of its presence in the market. Now Russia accounts for only about 3% global sales of Adidas Group.

In the third quarter of 2017, Adidas sales fell by 11%. The manufacturer stated that the reason for this is the financial situation in the country, and assumed that anything good from the Russian market should not wait: it will continue to shrink after four years of sanctions and dependence on oil prices.

Observers do not exclude that the position of the Adidas crippled not only the falling demand and the devaluation of the ruble. The reason is in the fact that the company failed to respond to the collapse of purchasing power due to improper crisis management. In addition, the weak link may have been, the quality of service and sales — the criteria to which consumers in crisis the market is particularly sensitive.

The company admitted that it hurt a decline in consumer sentiment in Russia, which is the market leader, accustomed to many years of success, was not ready.© AP Photo / Greg Wahl-StephensПримерка sneakers Adidas in Portland, OregonThree legendary stripes: why Adidas is losing ground in Russia© AP Photo / Greg Wahl-StephensПримерка sneakers Adidas in Portland, Oregon

Inferior to competitors in the United States

However, whatever the reasons for the sharp decline in the presence of Adidas in Russia in recent years, the real headache of the company brings the world’s largest market, where she has to desperately resist such brands as Nike and Under Armour.

Analysts pointed out that, in contrast to the younger, more aggressive competitors, Adidas is too slow, giving them speed to market for new models. To remedy the situation, the company even outbid the leading designers of his bitter rival Nike.

«Outside the U.S. Nike and Adidas maintain a stable parity. But the United States — the epicenter of the global market of sneakers for outdoor activities. And therefore for global leadership brand needs to hold the palm in the United States. It seems that Nike is now demonstrating a deeper and more extensive understanding of the needs of the consumer,» stated analysts at NPD, specializing in market research in sports industry.