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Adidas Positions to Double Digital Sales, Shrink Store Fleet

Adidas is looking to trim and transform stores over the next two years.

After scoring a 57 percent increase in online sales in 2017, the German athletic wear brand plans to continue to invest in its digital channel and reposition its physical store fleet.

The goal? To more than double online revenue by 2020. In 2017, online sales totaled 1.6 billion euro ($1.9 billion). By 2020, the company wants that number to be 4 billion euro ($4.9 billion).

In an interview with the Financial Times, CEO Kasper Rorsted referred to the company’s website as “the most important store we have in the world.” And as such, he said, Adidas is working to better position its infrastructure and logistics game to serve one-off online orders rather than huge deliveries to stores.

The company is boosting staff, rolling out new consumer facing apps and working closer with e-commerce natives like Zalando, according to the Times.

Though he didn’t commit to a number, Rorsted said “over time, we will have fewer stores, but they will be better.” His vision includes transitioning the stores from revenue first to brand first.

Adidas currently operates 2,588 stores, including full-line locations, factory outlets and concessions.

Worldwide, the Adidas brand saw an 18 percent increase in sales last year, which it attributed to strong performance in running as well as Adidas Originals and Adidas Neo, its apparel-driven younger line. Reebok was up by 4 percent on Classics and its running category.

In the company’s fourth quarter earnings report last month, Rorsted said, “Our strategic growth areas–North America, Greater China and Digital Commerce–were the main drivers of our performance.”

Sales were up 27 percent in North America last year, on a 35 percent increase for the Adidas brand which offset a 15 percent decrease in Rebook revenue.

The company achieved a 29-percent growth in Greater China during the same period.

Rorsted’s goal is to increase sales between 10 and 12 percent by 2020, while also increasing operating profit margin to 11.5% from just under 10 percent.

Analysts see the focus on digital sales as a key strategy toward improving profitability.

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