Adidas

adidas Group AG

Type	Public
Genre	Marketing of apparel, footwear & athletic equipment
Founded	1949
Founder(s)	Adolf Dassler
Headquarters	Germany
Key people	Herbert Hainer (CEO)
Revenue	EUR 10,084,000,000 (net sales 2006) [1]
Net income	EUR 483,000,000 (2006) [2]
Employees	226,376 (2006) [3]
Website	http://www.adidas-group.com

adidas Group AG is a global marketer of apparel, footwear, and athletic equipment. Once approaching bankruptcy, the company recovered by shifting production to Asia and investing in marketing. The #2 maker of sporting goods worldwide, behind Nike, the company sponsors football, basketball, and basball athletes, as well as the 2008 Olympic Games in Beijing. adidas bought Reebok in 2006 for some $3.8 billion. [4]

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Company History

adidas was registered as a company in 1949, named after its founder: 'Adi' from Adolf and 'Das' from Dassler. After Adi Dassler's death, Adi's wife Käthe, his son Horst, and his daughters carry on the business in the 1980s. During the 1990s, adidas moves from being a manufacturing and sales-based company to a marketing company. The company goes public in 1995 on the Frankfurt and Paris Stock Exchanges. adidas AG acquires the Salomon Group with the brands Salomon, TaylorMade, Mavic and Bonfire in December 1997. The new company is named adidas-Salomon AG. The Salomon Group (including Salomon, Mavic, Bonfire, Cliché and Arc’Teryx) is sold to Amer Sports in October 2005. The new adidas Group is focusing even more on its core strength in the athletic footwear and apparel market as well as the growing golf category. The legal name of the company changed to “adidas AG” in May/June 2006. On January 31, 2006 the adidas Group acquires Reebok. [5]

Historical Financial Information

Five Year Overview

Business Strategy

"Our multi-brand strategy has revolutionized how our Group can reach the consumer. This flexibility allows us to seize our opportunities from multiple approaches, as both a mass and niche player, covering more consumer needs, functionality, styles and price points. Across all brands, we focus on increasing awareness and visibility, providing clear and consistent messaging and supporting each product at point-of-sale. In addition, achieving our commercial goals also depends on leveraging the scale of our organization and operational excellence. For us, this includes consistent on-time retail delivery, quality assurance and the commitment and ability to “go the extra mile” for the customer. The integration of Reebok has given us additional insights to best-in-class techniques and processes across our entire organization. We are particularly focused on ensuring best-practice social and environmental standards, continuously optimizing our sales and distribution processes and improving our customer service efforts. Within the Group, we are always striving to improve internal processes and reduce complexity." [6]

Political and Public Influence

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Corporate Accountability

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Labor

Policy:

• 2001: adidas-Solomon joins Fair Labor Association, allowing FLA-accredited monitoring of suppliers
• adidas supply chain code of conduct
• 2002: working hours survey of adidas' Asian footwear factories finds that many workers exceed adidas maximum of 60 hours/week
• 2004: introduced ‘strategic monitoring’ to assess compliance risks and identify root causes of non-compliance. Auditors do more preparatory work and then check performance against a risk list customised for each factory that is monitored. Previously suppliers 'waited' for audits by SEA field staff that identified non-compliances before taking any remedial action. This approach means deeper monitoring of fewer suppliers, where factories may be visited two or three times more often than before. [7]
• 2004: Fair Labor Association accredits Reebok's compliance program
• 2005: Fair Labor Association accredits adidas's compliance program
• 2005: adidas joins Joint Initiative on Corporate Accountability and Workers Rights (Jo-In) Turkey Project, which seeks to develop a streamlined approach to codes of conduct and monitoring [8]. Other participants include Gap Inc., Hess Natur, Marks and Spencer, Nike, Patagonia and Puma.

Campaigns against company:

• 1999: Labour Behind the Label urged consumers send 80,000 postcards demanding commitment to a living wage to 12 companies operating in the United Kingdom: adidas, Arcadia, Benetton, C&A, Etam, Gap Inc., French Connection, Nike, Reebok, River Island, Storehouse and Virgin Clothing. [www.labourbehindthelabel.org/ publications/wearing_thin2.htm]
• 2000: workers at Thai Iryo Garment in Thailand are denied severance pay after factory closes down. Factory produces for adidas, as well as Nike, Fila, London Fog, Bacharach, Philips Van Heusen, Timberland, among others. After pressure on the Thai government and clients, company signs agreement with union to pay remaining compensation to 1,236 workers. [9]
• 2001: union organizers are arrested and fired from PT Panarub, a sports shoe factory in Indonesia producing exclusively for adidas. In spite of extensive pressure on company to intervene and a factory assessment by the Workers Rights Consortium in 2004, adidas chooses not to push for reinstatement of workers. [10]
• 2001: Workers Rights Campaign investigates abuses at PT Dada in Indonesia, revealing solitary confinement and physical abuse. Adidas agreed to support the WRC’s urgent recommendations and ask the factory to act. After a strike at the factory to protest rights violations, interventions by monitors from Adidas and other buyers, and communications from the WRC, PT Dada management began to remedy some of the working conditions that violate University and WRC Codes of Conduct. [11]
• 2002: The Thai Labour Campaign requests support in a campaign to help workers at the Thai Bed & Bath factory (producing for such brands as Nike, Levi Strauss & Co., adidas, and Reebok) get the back pay and severance pay they are owed. In 2003 workers receive compensation and establish a cooperative to run factory. [12]
• 2004: German Clean Clothes Campaignbrings OECD Complaint Case against adidas for labor rights violation in two Indonesian supplier factories. [13]
• 2007: collective severance agreement is reached between workers and BJ&B management in Dominican Republic. Factory, which produced for adidas and Nike, was site of important union victory in 2003, but has since been shut down. Severance agreement reached after American universities participating in the Workers Rights Consortium asked Nike and adidas to pressure factory management. [www.workersrights.org/Freports/BJBUpdate_05-30-07.pdf]

Major reports:
adidas social and environmental reports
Hong Kong Christian Industrial Committee. 2004. "Conditions of Women Workers in Special Economic Zones and Labour Standards in Supplier Factories of German Garment Retailer Companies and Brands in China"

Environment

• "In 2007 we began to keep a systematic record of the environmental impact of the production sites that were added to the adidas Group following the acquisition of Reebok. This will allow us to comprehensively report about our environmental performance in early 2008. " [14]
• "Our core suppliers must implement environmental management systems. Many of our Asian footwear factories led the way in establishing these systems. And increasingly apparel and accessories and gear factories are following their lead. In 2006, 21 footwear factories were certified according to ISO 14001 and/or OHSAS 18000. " [15]
• "Since 2000, we have been committed to reducing emissions of volatile organic compounds (VOCs) in footwear factories in Asia. Our target is average VOC emissions of 20 grams/pair of shoes. Our footwear suppliers have reduced VOC emissions from 140 grams/pair in 2000 to 19.3 grams/pair in 2006, which includes nearly all new adidas Group footwear factories... We regularly measure actual exposure in the workplace by asking workers to wear monitors during their working day. Emissions measured are far below the threshold limit value. These results suggest workers are not being exposed to dangerous levels of VOCs but nonetheless we remain committed to further reductions." [16]
• Programs for improving materials

Business Scope

Brands

• adidas
• Reebok
• TaylorMade

Suppliers

"At May 1st, 2007, we worked with more than 1080 factories operated by independent business partners (excluding factories of our licensees). Supply chain consolidation remains a major part of our strategy to form strong partnerships with our suppliers. By placing larger orders more frequently with particular suppliers we can have a greater influence on their social compliance. 67% of our factories are located in Asia, 19% in the Americas and 14% in Europe and Africa. 22% of all these factories are in China." [17]

Owned factories:

• adidas Footwear Factory, Scheinfeld, Germany
• adidas Apparel Factory, Suzhou, China
• TaylorMade Assembly Factory, Carlsbad, USA
• Reebok-CCM Hockey Factory, Cowansville, Canada
• Reebok-CCM Hockey Factory, St. Hyacinthe, Canada
• Reebok-CCM Hockey Factory, St. Jean, Canada
• Reebok-CCM Hockey Factory, Edmonston, Canada

Identified suppliers: adidas Group supplier list

Competitors

• Amer Sports
• Nike
• Rossignol

[18]

Customers	Suppliers	Creditors	Competitors
Customer 1	Supplier 1	Creditor 1	Competitor 1
Customer 2	Supplier 2	Creditor 2	Competitor 2
Customer 3	Supplier 3	Creditor 3	Competitor 3
Customer 4	Supplier 4	Creditor 4	Competitor 4

Financial Information (as of DATE)

Ticker Symbol: ADSG.DE
Main Exchanges: XETRA (Frankfurt)
Investor Website: http://www.adidas-group.com/en/investor/welcome.asp

Shareholder	% Total Shares held
Shareholder 1	% Held 1
Shareholder 2	% Held 2
Shareholder 3	% Held 3
Shareholder 4	% Held 4

Largest Shareholders

Production in Argentina, Brazil, Canada, China, Germany, India, Indonesia, Italy, Thailand, U.S.A., Vietnam. [19]

Country	Revenue	Profits	Assets	Employees
Country 1	Revenue 1	Profit 1	Assets 1	Employees 1
Country 2	Revenue 2	Profit 2	Assets 2	Employees 2
Country 3	Revenue 3	Profit 3	Assets 3	Employees 3
Country 4	Revenue 4	Profit 4	Assets 4	Employees 4

Governance

Executives

1. Herbert Hainer, CEO
2. Glenn Bennett, Global Operations
3. Robin J. Stalker, Finance
4. Erich Stamminger, President and CEO of the adidas Brand

Board members & affiliations

• Dr. Hans Friderichs, chairman (chairman of allit AG Kunststofftechnik)
• Fritz Kammerer, deputy chairman (chairman of central works council, adidas AG)
• Igor Landau, deputy chairman (boardmember Allianz AG, boardmember Sanofi-Aventis S.A., boardmember HSBC France S.A.)
• Sabine Bauer (senior manager Quality Service Systems, Global Operations, adidas AG)
• Dr. iur. Manfred Gentz (chairman of Zurich Financial Services, boardmember Deutsche Börse AG, boardmember DWS Investment GmbH)
• Dr. Stefan Jentzsch (boardmember Dresdner Bank AG, boardmember Premiere AG)
• Roland Nosko (trade union official IG BCE Trade Union, boardmember BP Gelsenkirchen GmbH, boardmember CeramTec AG)
• Hans Ruprecht (sales director Customer Service, Area Central, adidas AG)
• Willi Schwerdtle (general manager, Procter & Gamble Holding GmbH)
• Heidi Thaler-Veh (member of central works council, adidas AG]]
• Christian Tourres (former adidas AG executive)
• Klaus Weiß (trade union official IG BCE Trade Union, boardmember Wohnungsbaugesellschaft mbH Glück Auf Brambauer)

Date & venue of next AGM

May 8, 2008 in Fürth, Germany

Contact Information

Adi-Dassler-Straße 1
91074 Herzogenaurach
Germany
Tel:
http://www.adidas-group.com

Articles and Resources

Books on the Company

Smit, Barbara. 2006. Pitch invasion: three stripes, two brothers, one feud: Adidas, Puma and the making of modern sport. London: Allen Lane.