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Corporate Jun 18, 2013

Adidas sets new soccer sales goal in World Cup year

German sportswear maker Adidas AG forecast record sales for its soccer business in 2014, aiming to retain market leadership in the sport ahead of U.S. rival Nike Inc in a soccer World Cup year.

Adidas and Nike dominate a market for soccer kit - replica shirts, balls and boots - estimated to be worth around 5 billion euros annually.

"It is a battle between us and Nike, not only in Brazil but the whole football world," Adidas CEO Herbert Hainer told reporters at a news conference at the company's headquarters in southern Germany.

Setting out its targets a year before the World Cup kicks off in Brazil, Adidas said sales from its soccer division would break the 2 billion euro barrier for the first time in 2014.

Getty Images

Setting out its targets a year before the World Cup kicks off in Brazil, Adidas said sales from its soccer division would break the 2 billion euro barrier for the first time in 2014. Getty Images

Sales from its soccer business surpassed 1.7 billion euros in 2012 and are expected to remain around that level this year, despite no World Cup or European championships to stimulate demand.

Adidas is official sponsor of the 2014 World Cup and will supply the match balls, referees' kit and clothing for volunteers at venues. Nike sponsors the host nation Brazil, the five-times world champions and one of the most popular national teams around the globe.

Nike, the world's largest sportswear group, has recently agreed kit supply deals with France and England, two former World Cup winners. Adidas has contracts with World Cup holders Spain and former champions Germany and Argentina.

MORE PROGRESS

"Tradition is on the side of Adidas, but Nike is making more and more progress," said Peter Rohlmann of German consultancy PR Marketing. "They are very close together in terms of market share."

Adidas said it expected "double-digit sales growth" in Latin America in coming years, boosted by the interest generated by the World Cup.

CEO Hainer played down the impact of protests in Brazil which have swept the country as it hosts the Confederations Cup, an eight-team tournament seen as a test event for the World Cup.

Such protests tend to fade once the action begins on the field, Hainer added, citing previous competitions in Germany in 2006 and South Africa in 2010.

"As soon as the World Cup starts, people are excited about football, the demonstrations are over and I believe this will happen in Brazil as well," he added.

Hainer said Germany had benefited from hosting the World Cup, gaining new soccer stadiums and a boost for the economy.

Argentine Lionel Messi is lined up to play a prominent role in the Adidas World Cup marketing campaign. Messi and his father have denied wrongdoing after being accused of tax fraud in Spain where he plays for Barcelona.

"We definitely will continue to work with Lionel. He's the best football player in the world and we are happy that we have him," Hainer said.

Reuters

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