Adidas wants to compete with Nike in the US market. Right now North America accounts for around 20 per cent of Adidas’ sales. While Adidas has a neck-and- neck race with Nike everywhere else, Nike still has a lead in the US.
Adidas considers this its biggest weakness since North America's share of the global sports market is 37 per cent. So the brand feels there is a lot to catch up on. It wants to be significantly larger and more profitable in North America.
Adidas has set a margin target of around eleven per cent by 2020. Currently, it stands at 7.5 per cent to 7.7 per cent. The brand considers the US to be the most profitable market in the world since the market there is much less complex than it is in Europe. Just four or five major retail chains cover the entire US. Reebok is a part of Adidas.
In Q3 Adidas’ sales grew 13 per cent at constant exchange rates, Reebok grew by a modest 0.6 per cent. While the brand is growing in the rest of the world, Reebok’s home market, the US, is experiencing a decline in sales. The double digit growth in Adidas meant it won’t go in for cost cutting measures or staff cuts.