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Adidas looks to cities

News, 27 March 2015

HERZOGENAURACH: Adidas, the sportswear giant, intends to focus its marketing efforts on six cities around the world as part of a new five-year plan.

"Global brands are created in global cities," said Roland Auschel, head of global sales. "If we win running in New York and Los Angeles, we will win running in the US. Therefore, we are committed to win market and mind share in key cities around the globe."

In addition to the above two, Adidas will also be looking at London, Paris, Shanghai and Tokyo. Most of its investment in "talent and attention", Marketing Week reported, will also rest in these six cities.

Chief executive Herbert Hainer described them as "'halo' locations where the perceptions of brands will be shaped" and spread to the rest of the world.

The move comes as Adidas seeks to restore margins and profitability and to close the gap on rival Nike.

Hainer conceded mistakes had been made. "We did not focus enough on the needs of our consumer," he said. "This was a result of our function-driven organisation, which slowed down our decision-making, making us and our plan too static and not agile enough.

"Losing our number two position in North America is a direct consequence of that," he added.

One way Adidas plans to address this is by bringing some production back from Asia as it trials automated production units. Hainer noted that it could take six weeks to ship products from Asia to Europe, which was too long.

"We will bring production back to where the main markets are," he declared. "Robots can be everywhere."

This strategy will enable it to react more quickly to fast-changing fashion trends. In a similar spirit it will extend the innovations pioneered by its NEO teen fashion brand which gets new products into store in 45 days, compared with a sports industry standard of 12-18 months.

Data sourced from Marketing Week, Financial Times, Reuters; additional content by Warc staff