Washington, March 19 (IANS): The decision of Adidas to not renew its NBA outfit contract could be a risky move for the sportswear giant and reshape the United States retail sportswear market.
With months of declining market share, Adidas fell to the No.3 spot in US athletic apparel sales. Following that, Adidas announced it would not pursue an extension to its apparel deal with the National Basketball Association (NBA), which expires at the end of the 2016-17 season, reports Xinhua.
Changing the investment strategy to players' shoes means Adidas has strategically determined that it was better off investing in players than digging into selling jerseys. After losing ground to Nike and being surpassed by Under Armour, the decision is kind of bitter.
Adidas expect to double the number of basketball players who wear its shoes on court from 70 to 140 in the next five years, while also focus on youth basketball.
"We feel with a different investment strategy, we will be more successful. We want to put a bigger focus on players in our shoes," an Adidas spokeswoman said.
But the needle-to-head battle against Nike on player sponsorships is domed to be a tough road for Adidas. According to market researcher SportScanInfo, Nike and its Jordan brand subsidiary commanded 95.5 percent of the $4.2 billion basketball shoe market last year while Adidas only accounted for 2.6 percent.
LeBron James and Kevin Durant, the two highest sneaker sellers in the league, are both Nike guys. Anthony Davis, Kobe Bryant, Chris Paul, Russell Westbrook, James Harden, and Carmelo Anthony are also either Nike or Air Jordan players.
Adidas has a long list of notable former NBA players like Kareem Abdul-Jabbar, Elgin Baylor, Kobe Bryant, Dikembe Mutombo, Patrick Ewing among others but with Derrick Rose and Dwight Howard struggling with injuries, John Wall might be the only flag-carrier for the brand.
With NBA success, Nike quickly explored the fields as it has extended its on-field apparel deal with the National Football League (NFL), which expires after the 2016 season, for three more years till 2019. But for Adidas, it is going to be a story of redemption for the next three years.
Adidas has provided apparel for the NBA since 2006 and its 10-year deal, worth an estimated $400 million, expires at the end of the 2016-2017 season. With Adidas out, Nike and Under Armour are expected to battle it out for the contract.