Adidas is a German athletic apparel and footwear corporation headquartered in Herzogenaurach, Bavaria, Germany. It is the largest sportswearmanufacturer in Europe, and the second largest in the world, after Nike. It is the holding company for the Adidas Group, which also owns an 8.33% stake of the football club Bayern München, and Runtastic, an Austrian fitness technology company. Adidas’s revenue for 2018 was listed at €21.915 billion.
The company was started by Adolf Dassler in his mother’s house. He was joined by his elder brother Rudolf in 1924 under the name Gebrüder Dassler Schuhfabrik (“Dassler Brothers Shoe Factory”). Dassler assisted in the development of spiked running shoes (spikes) for multiple athletic events. To enhance the quality of spiked athletic footwear, he transitioned from a previous model of heavy metal spikes to utilising canvas and rubber. Dassler persuaded U.S. sprinter Jesse Owensto use his handmade spikes at the 1936 Summer Olympics. In 1949, following a breakdown in the relationship between the brothers, Adolf created Adidas and Rudolf established Puma, which became Adidas’s business rival.
The three stripes are Adidas’s identity mark, having been used on the company’s clothing and shoe designs as a marketing aid. The branding, which Adidas bought in 1952 from Finnish sports company Karhu Sports for the equivalent of €1,600 and two bottles of whiskey,became so successful that Dassler described Adidas as “The three stripes company”.
The company was founded by Adolf “Adi” Dassler who made sports shoes in his mother’s scullery or laundry room in Herzogenaurach, Germany after his return from World War I. In July 1924, his older brother Rudolf joined the business, which became “Dassler Brothers Shoe Factory” (Gebrüder Dassler Schuhfabrik). The electricity supply in Herzogenaurach was unreliable, so the brothers sometimes had to use pedal power from a stationary bicycle to run their equipment.
Dassler assisted in the development of spiked running shoes (spikes) for multiple athletic events. To enhance the quality of spiked athletic footwear, he transitioned from a previous model of heavy metal spikes to utilising canvas and rubber. In 1936, Dassler persuaded U.S. sprinter Jesse Owens to use his hand made spikes at the 1936 Summer Olympics. Following Owens’ four gold medals, the name and reputation of Dassler shoes became known to the world’s sportsmen and their trainers. Business was successful and the Dasslers were selling 200,000 pairs of shoes every year before World War II.
Both Dassler brothers joined the Nazi Party (NSDAP) in May 1933 and became members of the National Socialist Motor Corps. Adolf took the rank of Sportwart in the Hitler Youthfrom 1935 until the end of the war. During the war, the company was running the last sport shoe factory in Germany and predominantly supplied the Wehrmacht with shoes. In 1943, their shoe production was forced to cease operations and the company’s facilities and workforce was used to manufacture anti-tank weapons. From 1942 to 1945 at least nine forced labourers were working at both sites of the company.
The Dassler factory, used for production of anti-tank weapons during World War II, was nearly destroyed in 1945 by US forces. It was spared when Adolf Dassler’s wife convinced the American soldiers that the company and its employees were only interested in manufacturing sports shoes. American occupying forces subsequently became major buyers of the Dassler brothers’ shoes.
Split and rivalry with Puma
The brothers split up in 1947 after relations between them had broken down, with Adolf forming a company registered as Adidas AG, from Adi Dassler, on 18 August 1949, and Rudolf forming a new firm that he called Ruda – from Rudolf Dassler, later rebranded Puma. Urban myths have popularised two backronyms for the name “Adidas”: All Day I Dream About Sports and All Day I Dream About Sex.
Adidas and Puma SE entered into a fierce and bitter business rivalry after the split. The town of Herzogenaurach was divided on the issue, leading to the nickname “the town of bent necks”—people looked down to see which shoes strangers wore. Even the town’s two football clubs were divided: ASV Herzogenaurach club was supported by Adidas, while 1 FC Herzogenaurach endorsed Rudolf’s footwear. When handymen were called to Rudolf’s home, they would deliberately wear Adidas shoes. Rudolf would tell them to go to the basement and pick out a pair of free Pumas. The two brothers never reconciled and although they are now buried in the same cemetery, they are spaced as far apart as possible.
In 1948, the first football match after World War II, several members of the West Germany national football team wore Puma boots, including the scorer of West Germany’s first post-war goal, Herbert Burdenski. Four years later, at the 1952 Summer Olympics, 1500 metres runner Josy Barthel of Luxembourgwon Puma’s first Olympic gold in Helsinki, Finland.
At the 1960 Summer Olympics, Puma paid German sprinter Armin Hary to wear Pumas in the 100 meter sprint final. Hary had worn Adidas before and asked Adolf for payment, but Adidas rejected this request. The German won gold in Pumas, but then laced up Adidas for the medals ceremony, to the shock of the two Dassler brothers. Hary hoped to cash in from both, but Adi was so enraged he banned the Olympic champion.
The “Pelé Pact” was the most notable event in the Dassler brothers feud, when both owners of Adidas and Puma agreed not to sign a sponsorship deal with Pelé for the 1970 FIFA World Cup, feeling that a bidding war for the most famous athlete in the world would become too expensive, only for Puma to break the pact and sign him. Many business experts credit the brothers’ rivalry and competition for transforming sports apparel into a multi-billion pound industry.
The Trefoil logo was designed in 1971 and launched in 1972, just in time for the 1972 Summer Olympics held in Munich. This logo lasted until 1997, when the company introduced the “three bars” logo (that had been designed by then Creative Director Peter Moore), initially used on the Equipment range of products.
After a period of trouble following the death of Adolf Dassler’s son Horst Dassler in 1987, the company was bought in 1990 by French industrialist Bernard Tapie, for ₣1.6 billion (now €243.9 million), which Tapie borrowed. Tapie was at the time a famous specialist of rescuing bankrupt companies, an expertise on which he built his fortune.
Tapie decided to move production offshore to Asia. He also hired Madonna for promotion. He sent, from Christchurch, New Zealand, a shoe sales representative to Germany and met Adolf Dassler’s descendants (Amelia Randall Dassler and Bella Beck Dassler) and was sent back with a few items to promote the company there.
In 1992, unable to pay the loan interest, Tapie mandated the Crédit Lyonnais bank to sell Adidas, and the bank subsequently converted the outstanding debt owed into equity of the enterprise, which was unusual as per the prevalent French banking practice. The state-owned bank had tried to get Tapie out of dire financial straits as a personal favour to Tapie, it is reported, because Tapie was Minister of Urban Affairs (ministre de la Ville) in the French government at the time.
Robert Louis-Dreyfus, a friend of Tapie, became the new CEO of the company in 1994. He was also the president of Olympique de Marseille, a team Tapie had owned until 1993. Tapie filed for personal bankruptcy in 1994. He was the object of several lawsuits, notably related to match fixing at the football club. During 1997, he served 6 months of an 18-month prison sentence in La Santé prison in Paris. In February 2000, Crédit Lyonnais sold Adidas to Louis-Dreyfus for a much higher amount of money than Tapie owed, 4.485 billion (€683.514 million) francs rather than 2.85 billion (€434.479 million). They also purposely bankrupted Tapie’s company that owned Adidas, because only the company had the right to sue them.
Post-Bernard Tapie era
In 1997, Adidas AG acquired the Salomon Group who specialized in ski wear, and its official corporate name was changed to Adidas-Salomon AG. With this acquisition Adidas also acquired the TaylorMade golf company and Maxfli, which allowed them to compete with Nike Golf.
In 1998, Adidas sued the NCAA over their rules limiting the size and number of commercial logos on team uniforms and team clothing. Adidas withdrew the suit, and the two groups established guidelines as to what three-stripe designs would be considered uses of the Adidas trademark.
As CEO of Adidas, Louis-Dreyfus quadrupled revenue to €5.84 billion ($7.5 billion) from 1993 through 2000. In 2000, he announced he would resign the following year, due to illness.
In 2003, Adidas filed a lawsuit in a British court challenging Fitness World Trading’s use of a two-stripe motif similar to Adidas’s three stripes. The court ruled that despite the simplicity of the mark, Fitness World‘s use was infringing because the public could establish a link between that use and Adidas’s mark.
In September 2004, English fashion designer Stella McCartney launched a joint-venture line with Adidas, establishing a long-term partnership with the corporation. This line is a sports performance collection for women called “Adidas by Stella McCartney”.
In August 2005, Adidas declared its intention to buy Reebok for $3.8 billion (US$). This takeover was completed with partnership in January 2006 and meant that the company had business sales closer to those of Nike in North America. The acquisition of Reebok also allowed Adidas to compete with Nike worldwide as the number two athletic shoemaker in the world.
In 2005, Adidas introduced the Adidas 1, the first ever production shoe to use a microprocessor. Dubbed by the company “The World’s First Intelligent Shoe”, it features a microprocessor capable of performing 5 million calculations per second that automatically adjusts the shoe’s level of cushioning to suit its environment. The shoe requires a small, user-replaceable battery that lasts for approximately 100 hours of running. On 25 November 2005, Adidas released a new version of the Adidas 1 with an increased range of cushioning, allowing the shoe to become softer or firmer, and a new motor with 153 percent more torque.
In April 2006, Adidas announced an 11-year deal to become the official NBA clothing provider. The company has been making NBA, NBDL, and WNBA jerseys and products as well as team-coloured versions of the “Superstar” basketball shoe. This deal (worth over $400 million) took over the previous Reebok deal that had been put in place in 2001 for 10 years.
In November 2011, Adidas announced that it would acquire outdoor action sport performance brand Five Ten through a share purchase agreement. The total purchase price was US$25 million in cash at closing.
By the end of 2012, Adidas was reporting their highest revenues ever and Chief Executive Herbert Hainer expressed optimism for the year ahead. Adidas now has global corporate headquarters in Herzogenaurach, Germanyand many other business locations around the world such as London, Portland, Toronto, Tokyo, Australia, Taiwan and Spain.
In January 2015, Adidas launched the footwear industry’s first reservation mobile app. The Adidas Confirmed app allows consumers to get access to and reserve the brand’s limited edition sneakers by using geo targeting technology.
On 24 March 2015, Adidas and McDonald’s unveiled the 2015 McDonald’s All-American uniforms. For the third year in a row, players will be wearing short-sleeved jerseys, made with the same lightweight and breathable material as the ones used in the NBA.
In August 2015, Adidas acquired fitness technology firm Runtastic for approximately $240 million.
In March 2022, Adidas sold Reebok to the Authentic Brands Group, for ca. $2.5 billion.
In August 2022, the company announced that CEO Kasper Rørsted would step down in 2023. Bjørn Gulden became CEO in January 2023.