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Adidas hopes bumper marketing drive will help it take a bite out of rival Nike(Guardian (UK) Via Acquire Media NewsEdge) Adidas is planning its biggest-ever advertising campaign next year as it fights back against rival Nike. The world's second-largest sportswear maker has admitted that it needs to invest more in its brands to catch up with market leader Nike, after losing ground in developed markets. Herbert Hainer, the chief executive of the German company, promised the "most ambitious" brand campaign in the company's history for 2015. "It is with disappointment that after such a great summer of sport, I have to report that our group has not been able to meet the high expectations we laid out," he said. "We take full responsibility to rectify our shortfalls swiftly." He added: "We need to raise our game. I'm a striker and I want to win. It is obvious that we will have to go back to the training ground." Hainer said Adidas would lift its marketing budget from 13% to 14% of sales in 2015, raising it by up to euros 200m (pounds 159m). Adidas yesterday cut its profit margin outlook for this year after a 13% slide in operating profits to euros 220m in the second quarter. It took a hit from volatile emerging markets currencies, in particular the weaker Russian rouble, coupled with disappointing golf sales. It plans to restructure its golf arm, TaylorMade, at which sales fell by 18%, but Hainer refused to give details on job cuts. The company already lowered its sales and profit estimates last week despite receiving a boost from the World Cup in Brazil, the advent of which is expected to lead to record sales of euros 2bn in football products - from replica shirts to footballs. Adidas sold more than 14m of the official World Cup "Brazuca" balls, and more than 8m football jerseys. It kitted out nine teams, including champions Germany as well as Argentina and Colombia. Adidas recently won a 10-year contract to be Manchester United's kit sponsor for a record-breaking minimum guarantee of pounds 750m. The deal will kick in at the start of the 2015-16 season, ending Nike's 13-year relationship with the club. Nearly two-thirds of its sales are made through third-party retailers, but Adidas has now invested in opening more of its own shops because they are more profitable. However, it has scaled back store openings in Russia, its third-biggest market. The escalating crisis in Ukraine has made Russians more reluctant to shop. The company's shares tumbled more than 11% after last week's profit warning and traded down 3.5% yesterday afternoon. Adidas expects to make a profit of euros 650m this year, down from the euros 820m to euros 930m previously forecast. Analysts at Citi said they remained sceptical about the outlook for the stock, given the scaled-back investment in Russia, higher marketing costs and adverse currency trends. Captions: Adidas adverts were the focus of many fans' photos after Luis Suarez's biting incident at the World Cup, but the company, which has cut its profit outlook, shows no signs of drawing level with rival Nike Photograph: Tom Jenkins for the Guardian (c) 2014 Guardian Newspapers Limited. |