Speaker 1: You may have heard about the rather dramatic business breakup
Speaker 1: between Adidas and the rapper and designer Kanye West, who
Speaker 1: now goes by the name ya Yay, has had no
Speaker 1: trouble keeping himself in the headlines for all kinds of things,
Speaker 1: including a torrent of anti Semitic rants that ultimately left
Speaker 1: Adidas no choice but to sever the multi billion dollar
Speaker 1: arrangement with him last October.
Speaker 2: Bloomberg has learned that Adidas has to sever ties with you.
Speaker 3: The rapper formally known as Kanya West now Yea, is
Speaker 3: facing growing fallout from a recent string of offensive remarks.
Speaker 3: Adidas or Adidas warns that it may report an operating
Speaker 3: loss of as much as seven hundred and fifty million
Speaker 3: dollars this.
Speaker 4: Year's partnership the Easy brand that was dissolved in octogra
Speaker 4: after he'd made some anti Semitic remarks. The Audidas before
Speaker 4: that point had called it the most successful partnership of
Speaker 4: its kind in the industry in history.
Speaker 1: Adidas now has to find a way to make up
Speaker 1: for the loss of it's hugely lucrative Yeasy line of shoes.
Speaker 5: There's a Yeasy sized hole in their product assortment that
Speaker 5: they need to figure out how to fill.
Speaker 1: And what to do with the piles of yeasy merchandise
Speaker 1: they've still got on hand.
Speaker 3: It's hard to envision a bigger collection of crises hitting
Speaker 3: a company all at once.
Speaker 1: That's Bloomberg reporters Kim Bassin and Tim Love. They've been
Speaker 1: all over this story for months, and they tell the
Speaker 1: whole saga in the latest issue of Business Week. I'm
Speaker 1: West Casova today on the big tag how did this
Speaker 1: all go so wrong? And can Adidas climb back from it? Kim,
Speaker 1: Adidas is sitting on a giant pile of money, essentially
Speaker 1: that they don't have any idea what to do with.
Speaker 5: There are millions of pairs of unsold sneakers just sitting
Speaker 5: around and we've been calling it sneaker purgatory in all
Speaker 5: these warehouses.
Speaker 6: Around the world.
Speaker 5: These are Yeasys designed by Kanye West, who now goes
Speaker 5: by Ya, and since that partnership with Easy collapsed last year,
Speaker 5: there's now about one point three billion dollars worth of
Speaker 5: these sneakers just waiting to be sold.
Speaker 3: When the partnership was canceled in late October, Adidas had
Speaker 3: already placed orders for many of these pairs to be produced,
Speaker 3: and so over the months that followed, the sneakers kept
Speaker 3: piling in from factories in Asia to Didas's warehouses that
Speaker 3: are scattered around the world. So it wasn't until about March,
Speaker 3: five months say, after the whole Yeasy collaboration exploded, that
Speaker 3: Adidas finally he had all the sneakers ready to go
Speaker 3: in all of its warehouses, and then it just sat there.
Speaker 1: And that's because this deal fell apart in spectacular fashion.
Speaker 6: That's correct, it definitely did.
Speaker 5: This goes back to last fall where Yay started basically
Speaker 5: yelling on social media at Adidas executives and it kept
Speaker 5: spiraling from there. He accused them of stealing his designs,
Speaker 5: He accused them of profiting off of him inappropriately. He
Speaker 5: said they weren't allowing him into meetings that he should
Speaker 5: have been in and he was just being mistreated as
Speaker 5: their most important business partner. From there, he said he
Speaker 5: wanted to get out of his deals with Corporate America.
Speaker 5: He was done with Adidas, he was done with GAP,
Speaker 5: he was done with all the big corporations that he
Speaker 5: had lined up these long term, huge billion dollar agreements with,
Speaker 5: and it just started to fall apart.
Speaker 6: And so the way it fell apart was pretty remarkable too.
Speaker 3: I mean, he had all this beef with Adidas, and
Speaker 3: he brought up beef with his other corporate partners like
Speaker 3: Gap and some mothers. But then beyond that, he just
Speaker 3: started ratcheting up just wild behavior and saying highly offensive
Speaker 3: and toxic things.
Speaker 6: And it happens so quickly.
Speaker 5: Right, So back in October, I get a phone call
Speaker 5: in the middle of the night. It's like midnight on
Speaker 5: a Thursday, I believe, and it's Kanye West and he's
Speaker 5: calling me to tell me that he wants to get
Speaker 5: away from corporate America, go out on his own and
Speaker 5: do everything himself. Like three days later, his lawyers sent
Speaker 5: a season desists.
Speaker 6: To Gap saying they want out of that deal.
Speaker 5: It's only like six weeks after that original phone call
Speaker 5: where all the deals are gone and Adida says it's
Speaker 5: terminating his partnership.
Speaker 1: Kim, can you describe that phone call.
Speaker 5: There's a point at the very beginning where Yay asked
Speaker 5: me if he sounds crazy, and he doesn't. He's answering
Speaker 5: questions thinking several seconds before he delivers like a bar
Speaker 5: to answer it, and it seemed quite calculated. He seemed
Speaker 5: like he was first off, legitimately angry at his business
Speaker 5: partners and really wanting to do something about it.
Speaker 6: I think at the time I didn't fully.
Speaker 5: Appreciate that he was going to make two hundred million
Speaker 5: dollars nearly in royalties off of this Adidas deal last year,
Speaker 5: and to be willing to just chuck that away was surprising.
Speaker 1: This deal between Adidas and Kanye West really was the
Speaker 1: thing that brought the company back, Is that right, Tim.
Speaker 3: Yeah, I think that's fair to say. There were a
Speaker 3: couple of things going on. But if you go back
Speaker 3: in time to the twenty twelve twenty thirteen, Adidas was
Speaker 3: really struggling, particularly in the US. It was just losing
Speaker 3: market share and it just seemed driftless. And at one
Speaker 3: time Adidas was like the dominant sports company in the US.
Speaker 3: Of course, this was before the rise of Nike, and
Speaker 3: a pivotal figure in that was Michael Jordan, who this
Speaker 3: kind of just goes to show it. He was a
Speaker 3: diehard Adidas fan. He played in Adidas, he wanted to
Speaker 3: sign with Adidas by you know, early eighties. He's coming
Speaker 3: out of University North Carolina and these up and comers
Speaker 3: swashbuckling from Nike. They offer him a deal he couldn't refuse,
Speaker 3: and Adidas refused to match it. So Jordan went with
Speaker 3: Nike and the rest is history.
Speaker 7: On September fifteenth, Nike created a revolutionary new basketball shoe.
Speaker 7: On October eighteenth, the NBA threw them out of the game. Fortunately,
Speaker 7: the NBA can't stop you from wearing them where Jordan's
Speaker 7: from Nike.
Speaker 3: But if you fast forward to twenty fourteen, by that point,
Speaker 3: Adidas had made a couple of last ditch efforts to
Speaker 3: try to re catch Nike. They bought reboch in two
Speaker 3: thousand and six for about almost four billion dollars. Six
Speaker 3: years after that, they're looking around and you know that
Speaker 3: hasn't helped, and they're losing business in the US and
Speaker 3: they didn't have a lot that was generating buzz.
Speaker 6: So what do they do? Well.
Speaker 3: The first thing is they brought in an American for
Speaker 3: the first time to head up their global brands. His
Speaker 3: name is Eric led Key, and he kind of created
Speaker 3: a team. He'd spent a lot of time in Portland
Speaker 3: before he came to Germany, and he obviously as an American,
Speaker 3: he really understands the US and he understands kind of
Speaker 3: the challenges that Adidas employees.
Speaker 6: In the US space. So he set.
Speaker 3: Up a team and he empowered a lot of people
Speaker 3: who really understand the US a lot better than the
Speaker 3: people who had pre obviously been you.
Speaker 6: Know, running the show.
Speaker 3: And they set up partnerships with Pharrell, and they introduced,
Speaker 3: you know, some new products that were getting buzz.
Speaker 6: But if you have to go back, the.
Speaker 3: One name, the one personality that was just like this relentless,
Speaker 3: like he himself called himself a son, and he really
Speaker 3: did have this sort of solar energy that's Kanye West,
Speaker 3: and he brought it to Adidas, and the sales of
Speaker 3: the Yeasy would rise and rise, and the profitability were great.
Speaker 3: But beyond that, he also just kind of created a
Speaker 3: new energy at the place, I think in credibility for
Speaker 3: Adidas in the US. So there really was what they
Speaker 3: call a halo effect for the whole brand.
Speaker 5: In the same way that Jordan liked Adidas and not
Speaker 5: Nike and signed with the other one, Kanye West loved
Speaker 5: Nike not Adidas. So he dropped a couple shoes in
Speaker 5: the late two thousands and early twenty ten's The Air
Speaker 5: Yeasy with Nike.
Speaker 7: Thanks to the new Nike Air Easy with the glow
Speaker 7: and the dark soul, Jimmy can use this as.
Speaker 5: A nightlind And the moment he got signed away, it
Speaker 5: really looked like that Adidas had found something really special.
Speaker 5: Despite warnings about his behavior and his antics in public,
Speaker 5: whatever that was, he had something just different in a
Speaker 5: way to lure people to this product. Every word out
Speaker 5: of his mouth would be something everyone paid attention to.
Speaker 5: And this combination of design, product, distribution, operations, and marketing
Speaker 5: just clicked.
Speaker 1: And why did he switch? Why did he leave Nike
Speaker 1: to go to Adidas when he liked Nike so much?
Speaker 5: He left Nike because he wanted royalties and they would
Speaker 5: not give him royalties on the shoe. So Adidas gave
Speaker 5: him an offer that he essentially couldn't refuse. It was
Speaker 5: more autonomy. He could run his own design studio and
Speaker 5: work with Adidas instead of for them. The idea behind
Speaker 5: that partnership was that he would get the freedom that
Speaker 5: he's so so much desired at Nike.
Speaker 6: And in the first shoe sold out immediately.
Speaker 5: The Yeezy Boost three fifties became like the main line
Speaker 5: for Yeezy's and those things over the years would just
Speaker 5: constantly sell out and these limited edition drops and then
Speaker 5: resold on the secondary market for hired than retail prices.
Speaker 5: It really made this like sneakerhead economy, along with Jordan's,
Speaker 5: such a big, big thing that it grew into.
Speaker 1: Can you describe for non sneaker heads among our listeners
Speaker 1: what these shoes look like, what made them special and distinctive?
Speaker 5: The three fifties have these nit upper sections and then
Speaker 5: the Boost technology, which is Adidas's response to Nike's Air
Speaker 5: on the soul, and they have these ridges on the side.
Speaker 5: They're comfortable and they just fit with like this kind
Speaker 5: of street where aesthetic that Kanye helped develop. So beyond that,
Speaker 5: all these different kinds of easies were sold too. So
Speaker 5: there's the foam Runner, which looks like this like perforated marshmallow,
Speaker 5: kind of like a crock.
Speaker 6: It's a slipper.
Speaker 5: It's super weird, but ugly doesn't necessarily mean bad in
Speaker 5: the shoe industry. It means distinctive and if you're wearing those,
Speaker 5: you know exactly what those are. And his styles over
Speaker 5: the years really resonated with so many people.
Speaker 1: After the break, just how much money was Easy worth
Speaker 1: to Adidas tim how lucrative all told was this deal.
Speaker 3: It was always a mystery and everyone wanted to know,
Speaker 3: and you know, drips and drabs of rumors came out
Speaker 3: or leaks, but no one had a full read on
Speaker 3: the situation until October, when Adidas terminated the partnership, and
Speaker 3: so they had to announce what the financial impact of
Speaker 3: that was going to be, merely for the fact that
Speaker 3: they weren't going to be able to sell them for
Speaker 3: the remaining two months of twenty twenty two. And with
Speaker 3: that little shard of information, analysts kind of reverse engineered
Speaker 3: the economics of it and quickly determined that the profits
Speaker 3: were somewhere in the vicinity of forty percent to fifty
Speaker 3: percent of Adidas's profits from the Easy franchise. So from
Speaker 3: a revenue perspective, they were only about eight percent of
Speaker 3: Adidas's revenue, but from a profitability standpoint, they were nearly half.
Speaker 3: And that just kind of goes to show you that
Speaker 3: people were willing to pay top dollar for these things.
Speaker 3: After Adidas canceled the partnership in October, when the Wall
Speaker 3: Street analysts were parsing the statements and the figures, several
Speaker 3: of them estimated that the twenty twenty one revenue for
Speaker 3: Easy was at two billion dollars.
Speaker 5: The dependence on Eazy's was super interesting. They have so
Speaker 5: many other product life. They have these old designs of
Speaker 5: shoes that have stood the test of decades and decades
Speaker 5: of time, like the Gazelle and the Samba and the
Speaker 5: Superstar and Stan Smith. These are legendary shoes, right and
Speaker 5: they've been re releasing them in different styles over the
Speaker 5: years and years and years. They come in, they come
Speaker 5: out of style, and at a certain point, product cycles
Speaker 5: just went out of wax. Things weren't working. They made
Speaker 5: too many stand Smiths, they couldn't sell them, they couldn't
Speaker 5: get them off the shelves, and the one left standing
Speaker 5: was the Easy and that was creating excitement for consumers.
Speaker 5: It was the one portion of their business that was
Speaker 5: creating all this excitement. In the first year after Kanye
Speaker 5: re signed his deal with Adidas, it extended ten years
Speaker 5: back in twenty sixteen. The first full year after that,
Speaker 5: Eases did about three hundred million in revenue, and a
Speaker 5: couple of years later already broke a billion in annual
Speaker 5: rev It was a big business for them. Beyond that,
Speaker 5: the shoes themselves were profit drivers. These shoes sell for
Speaker 5: two hundred dollars retail, and then part of the whole
Speaker 5: hype cycle that we talk about in the sneaker world
Speaker 5: is that people aren't just attracted to them because they
Speaker 5: want to wear them, they want to resell them. So
Speaker 5: they buy these two hundred dollars sneakers and resell them
Speaker 5: for two fifty three hundred, four hundred.
Speaker 6: Some of them go crazy.
Speaker 5: If you find a pair of the old like Yeezy
Speaker 5: Duck boots, you can probably sell those for fifteen hundred
Speaker 5: that kind of thing. The most expensive one ever sold,
Speaker 5: I believe, was one a prototype version of the Nike
Speaker 5: Air Yeezys that Kanye himself wore one time, and they
Speaker 5: they auctioned for like one point eight million.
Speaker 3: Once Adidas was really gaining momentum last decade, the middle
Speaker 3: of last decade, everyone had pretty much given up hope
Speaker 3: on Adidas ever catching Nike in terms of size, at
Speaker 3: least in the near term. But a lot of investors
Speaker 3: wanted Adidas to become as profitable as Nike, and so
Speaker 3: when Adidas decided to go out and get a new CEO,
Speaker 3: they brought in Casper. Worsted, who's a real operations guy,
Speaker 3: numbers focused and he had had a really hot streak
Speaker 3: at the German soap maker Hankle, and so he went
Speaker 3: about optimizing a bit for the back half of last decade.
Speaker 3: Everything looked just golden at Adidas, and then the pandemic
Speaker 3: hit and that's when it was a big turning point
Speaker 3: for Adidas. First thing that happened was in March, Germany
Speaker 3: went into lockdown and it emerged that Worsted had not
Speaker 3: wanted to pay rent in Germany at the Adida stores
Speaker 3: that were shuttered. This of course caused just rage in Germany.
Speaker 3: It was front page news and all the tabloids. Then
Speaker 3: you had the event with the police murder of George
Speaker 3: Floyd and the protests all over. There were employee protests
Speaker 3: at Adidas, particularly workers of color who had been complaining
Speaker 3: that the company did not handle issues, particularly for minority workers,
Speaker 3: and so that came to a four. So in March
Speaker 3: of twenty twenty one, Adidas unveiled its new five year
Speaker 3: strategy called Own the Game, and within two weeks within
Speaker 3: China boycott started. There was a huge backlash and boycotts
Speaker 3: of Western brands who had taken a stand against cotton
Speaker 3: that was sourced in a part of the country where
Speaker 3: there's a lot of concern about forced labor and other
Speaker 3: human rights abuses of the Wigers, and it hit Adidas
Speaker 3: very hard. Adidas had been growing very fast in China,
Speaker 3: and basically overnight the light switch was turned and that
Speaker 3: just kind of rocked the whole five year plan that
Speaker 3: Worsted had intricately come up with. So if we enter
Speaker 3: twenty twenty two, this is where more headaches come. Russia
Speaker 3: invades Ukraine. Now Russia is a market that Adidas one
Speaker 3: of the few countries in the world where Adidas has
Speaker 3: always clobbered Nike. Overnight, the whole Russia market is gone.
Speaker 3: And so over the course of last year, Adidas had
Speaker 3: to put out three or four different profit warnings where
Speaker 3: they had to lower their financial targets over the course
Speaker 3: of the year. In the middle of it, the supervisory
Speaker 3: board finally decided it was time for Casperwarstad to go.
Speaker 3: They put that out in August. He's going to leave
Speaker 3: at some point in twenty twenty three. Kanye West or Yea,
Speaker 3: pours salt in the wound and he posts very what
Speaker 3: he seems offensive posts on Instagram a fake New York
Speaker 3: Times front page that said Caspererwiss dead dead at sixty.
Speaker 3: Within two weeks of that is when Kanye picks up
Speaker 3: the phone and calls Kim on my colleague here and
Speaker 3: starts going on a war against all of his corporate partners.
Speaker 1: As you described, Kim Ye calls you and says he's
Speaker 1: fed up and wants to cancel the deal with Adidas.
Speaker 1: But Adidas too wasn't so happy with him either.
Speaker 5: At first, he wanted to this is a quote from him,
Speaker 5: He wanted to co parent the sneakers, which means I
Speaker 5: guess he would design them and they wouldn't deal with
Speaker 5: each other very much, and Adidas would just sell them.
Speaker 3: So then October comes, there's the fashion show where he
Speaker 3: wears shirts that say white lives matter, which the Anti
Speaker 3: Defamation League regards as hate speech.
Speaker 2: Tonight a firestorm of controversy for Kanye West because of
Speaker 2: this photo taken at his Paris fashion show. Yay and
Speaker 2: conservative commentator Candice Owens war shirts with the phrase white
Speaker 2: lives matter on the back, a phrase activist say is
Speaker 2: harmful and has been used by white supremacist groups.
Speaker 3: And then Kanye starts making these increasingly awful antisemitic remarks.
Speaker 5: The company put the relationship under review, and that's a
Speaker 5: process where they're trying to figure out what exactly to
Speaker 5: do with this enormous business line that suddenly is toxic.
Speaker 3: Well, they finally did decide in October twenty fifth. By
Speaker 3: that point, the pressure had just gotten so hot. There
Speaker 3: were boycotts being called for in the US and in
Speaker 3: Europe against Adidas products, and it's hard to envision a
Speaker 3: bigger collection of crises hitting a company all at once.
Speaker 5: There was a two minute phone call between various members
Speaker 5: of top management, including Casper Rorstad, the CEO, as they
Speaker 5: discussed finally what to do about this, And on that
Speaker 5: day they decided, effective immediately, to sever ties and end
Speaker 5: the partnership.
Speaker 1: Why didn't do you just sever that relationship when he
Speaker 1: started making these anti semitic remarks.
Speaker 5: A couple other companies that dealt with Kanye and had
Speaker 5: deals with Kanye did drop him. He had worked with Balenciaga,
Speaker 5: They said they wouldn't work with him again. He had
Speaker 5: a big deal with Gap to sell apparel, and Gap
Speaker 5: started to wind down that partnership quite quickly. Adidas fell
Speaker 5: under lots of criticism for taking so long to sever
Speaker 5: their ties with him. They never really did address why
Speaker 5: they didn't sever that relationship sooner. I think it was
Speaker 5: mostly about figuring out what to do with all this stuff. Right,
Speaker 5: there's one point three billion in inventory. You're also trying
Speaker 5: to figure out how to fill the gaps in your
Speaker 5: product lines. There's a yeasy sized hole in their product
Speaker 5: assortment that they need to figure out how to fill.
Speaker 5: I think, as we've seen, it's taken them seven months
Speaker 5: to even figure out what to do with the shoes,
Speaker 5: like these things have been sitting there for so so long.
Speaker 3: There are no good answers here. I mean, Adidas will say,
Speaker 3: look compared to those other companies that he had partnerships with,
Speaker 3: we had the longest running partnership. We had the biggest partnership.
Speaker 3: We had so many employees, We have contracts with factories
Speaker 3: in Asia, we have complex dealings. You can't just turn
Speaker 3: that off overnight.
Speaker 1: When we come back. Adidas moves ahead without easy How
Speaker 1: did Kanye respond to being cut off from Adidas?
Speaker 5: Kanye did not respond super well. There was a day
Speaker 5: where he went to the Sketcher's headquarters out in California
Speaker 5: and just barged in there and was like, I want
Speaker 5: to talk to your executives. It seemed like he didn't
Speaker 5: think that Adidas would actually end things.
Speaker 1: Even though he was saying that he wanted to have
Speaker 1: nothing to do with corporations anymore.
Speaker 6: He went on a.
Speaker 5: Podcast and he said, I can say anti Semitic things
Speaker 5: and Adidas can't drop me. I think he thought he
Speaker 5: was like so valuable that that company was forever stuck
Speaker 5: with him, and that co parenting thing that he thought
Speaker 5: of where he would just do his own thing and
Speaker 5: the company would sell his stuff and he would still
Speaker 5: make money off of it. Perhaps that was the arrangement
Speaker 5: that he wanted long term.
Speaker 1: I should say that business. We tried to contact ye
Speaker 1: for comment, but he couldn't be reached. What are they
Speaker 1: going to do with the shoes?
Speaker 6: Kim?
Speaker 5: For the last several months over at Adida's headquarters in Germany,
Speaker 5: executives have been trying to figure out what to do
Speaker 5: with this one point three billion worth of shoes, right
Speaker 5: so they've considered all sorts of things. They thought about
Speaker 5: removing the Yeasy logo from the shoes and then selling
Speaker 5: them that way, or they could have donated them to
Speaker 5: victims of you know, disaster struck countries and things like that.
Speaker 6: Burning them came up.
Speaker 5: As well, incinerating all these shoes, as some luxury companies
Speaker 5: have done in the past with excess merchandise, so that
Speaker 5: they don't end up out in the world, and like
Speaker 5: dilute the brand. They thought about chopping them into bits
Speaker 5: and then turning them into soccer fields, like the turf
Speaker 5: on a field needs plastic and all this other stuff.
Speaker 5: But Adidas has decided to sell their remaining easy inventory,
Speaker 5: and they say they will donate a portion of the
Speaker 5: proceeds to charities, including the Anti Defamation League.
Speaker 1: Are people gonna want to buy them?
Speaker 5: Yeah, that's a big question, right. We don't know if
Speaker 5: they're going to be put on sale for cheaper. We
Speaker 5: don't know, you know, in what order all this stuff
Speaker 5: will be sold. And it's also unclear how long this
Speaker 5: is going to take them to clear all this inventory,
Speaker 5: because we're unsure what the demand is.
Speaker 3: Right.
Speaker 5: Are we going to be sitting here in twenty twenty
Speaker 5: six still talking about Adidas with its remaining pile of
Speaker 5: yeasies that it can't get rid of.
Speaker 6: I don't know, but we had to Wayne and see.
Speaker 1: So Tim At the beginning of this year, Adidas got
Speaker 1: a new CEO and what's his plan to take the
Speaker 1: company forward? Post yeasy.
Speaker 3: In January, Adidas broad in Bjorn Gulden, a Norwegian veteran
Speaker 3: of the industry, to be the new CEO.
Speaker 6: And he didn't have to come from far.
Speaker 3: Bjorn had spent the last nine years as CEO of Puma,
Speaker 3: which is located about one mile south of Adidas, also
Speaker 3: in hertzogn Aurach, and Bjorn is also has Adidas in
Speaker 3: his blood. He spent the first decade of his career
Speaker 3: at Adidas in the nineties. People say he knows basically
Speaker 3: everything about the industry. He's been so immersed in it.
Speaker 3: So whereas Casper Wrestaid was an outsider who came in,
Speaker 3: Bjorn like it's flowing through his blood. He immediately appointed
Speaker 3: himself as the head of global brands.
Speaker 6: He thinks the company needs to.
Speaker 3: Be a lot faster, a lot better at managing its
Speaker 3: product cycle. He's going to have to cook up some
Speaker 3: new collaborations. So he hasn't put out a new strategy
Speaker 3: for DTIs. He claims he'll probably do so later this
Speaker 3: year early next year. But if you had to guess
Speaker 3: what it is, I would say it's the following a
Speaker 3: much bigger long term.
Speaker 6: Focus on results.
Speaker 3: He's not as obsessed with the quarterly results as his predecessor.
Speaker 6: He has a much longer term vision.
Speaker 3: He has gone out of his way to set expectations
Speaker 3: very low from investors. This constant just like punch punch
Speaker 3: punch of bad news that Adidas investors have endured in the.
Speaker 6: Last few years.
Speaker 3: Bjorn basically came in in February and he said, guys,
Speaker 3: this is a dire picture.
Speaker 6: That we have.
Speaker 3: Bear with me, Batten down the hatches. We're gonna fix this.
Speaker 3: Just give me some time. It's going to take a
Speaker 3: few years, but we're gonna get there. So some people
Speaker 3: sold at that point. Those who stayed are Bjorn believers.
Speaker 3: They've seen his touch at Puma, where he tripled sales
Speaker 3: in nine years. He is a guy who is obsessed
Speaker 3: with sports. He wants Adidas to not be so focused
Speaker 3: on a small number of sports, but he wants to
Speaker 3: see it in every event at the Olympics. He doesn't
Speaker 3: care so much if Adidas is making wrestling shoes or
Speaker 3: ski boots. They may not be the most lucrative of sports.
Speaker 3: But he thinks that as a company that's obsessed with sports,
Speaker 3: as a company that was founded and spent decades as
Speaker 3: the world's biggest sports company, that's the DNA of Adidas.
Speaker 3: And the final thing I would say is he recognizes
Speaker 3: and articulates the difference between Adidas and Nike. People have
Speaker 3: always wondered, why can't it just catch Nike. Bjorn says,
Speaker 3: we shouldn't try, We should just be Adidas. Nike is
Speaker 3: based in the US. Nike look at Air Jordan. Nike
Speaker 3: has the advantage of it can just basically create street
Speaker 3: culture in the US and then export it to around
Speaker 3: the world. Everyone wants to buy the US streetwear. Well,
Speaker 3: Germany doesn't have its own street culture that countries want
Speaker 3: to copy, so Adidas has to do it differently.
Speaker 1: Tim, Tim, thanks so much for coming on the show.
Speaker 6: You bet of course, thanks for having us.
Speaker 1: Thanks for listening to us here at the Big Take.
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