ADIDASAdidas AG is a major German-based sports apparel
manufacturer and parent company of the Adidas Group, which consists
of the Reebok sportswear company, Taylor MadeAdidas golf company
(including Ashworth), and Rockport. Besides sports footwear, the
company also produces other products such as bags, shirts, watches,
eyewear and other sports and clothing-related goods. The company is
the largest sportswear manufacturer in Europe and the second
biggest sportswear manufacturer in the world, after its U.S. rival
Nike. Adidas was founded in 1948 by Adolf "Adi" Dassler, following
the split of Gebrder Dassler Schuhfabrik between him and his older
brother, Rudolf. Rudolf would later establish Puma, which was the
early rival of Adidas. Registered in 1949, Adidas is currently
based in Herzogenaurach, Germany, along with Puma. The company's
clothing and shoe designs typically feature three parallel bars,
and the same motif is incorporated into Adidass current official
logo. The "Three Stripes" was bought from the Finnish sport company
Karhu Sports in the 1950s. The company revenue for 2009 was listed
at 10.38 billion and the 2008 figure at 10.80 billion.
HistoryThe company was founded in Germany in 1924 by the
brothers Adolf and Rudolf Dassler. They first named the brand
"Dassler Shoes" that started getting popular thanks to sponsored
athletes in the Olympics. In 1948, though, Rudolf decides to start
its own company named Puma. That's when, in 1949, Adolf comes up
with the three stripes and changes his company's name to Adidas
('Adi' from his nickname and 'Das' from Dassler).
Page 1 of 76
Adidas was the leading brand among athletes community when, in
1978, Adolf Dassler passed and his wife Kthe, his son Horst, and
his daughter Carry started running the business. That was a big
transition that was completed in the 90's when Robert Louis-Dreyfus
became Adidas CEO: Adidas started moving from being a manufacturing
and sales based company to a marketing company.
The Brands under The Hood of Adidas Group
Adidas Group
Adidas
Reebok
Taylor made
Adidas has four different Logos
Page 2 of 76
Adolf "Adi" Dassler started to produce his own sports shoes in
his mother's wash kitchen in Herzogenaurach, Bavaria, after his
return from World War I. In 1924, his brother Rudolf "Rudi" Dassler
joined the business which became Gebrder Dassler Schuhfabrik
(Dassler Brothers Shoe Factory) and prospered. The pair started the
venture in their mother's laundry, but at the time, electricity
supplies in the town were unreliable, and the brothers sometimes
had to use pedal power from a stationary bicycle to run their
equipment. By the 1936 Summer Olympics, Adi Dassler A pair of
Adidas Samba football drove from Bavaria on one of the world's
trainers.full of spikes and first motorways to the Olympic village
with a suitcase persuaded U.S. sprinter Jesse Owens to use them,
the first sponsorship for an African American. Following Owens's
haul of four gold medals, his success cemented the good reputation
of Dassler shoes among the world's most famous sportsmen. Letters
from around the world landed on the brothers' desks, and the
trainers of other national teams were all interested in their
shoes. Business boomed and the Dasslers were selling 200,000 pairs
of shoes each year before World War II. Late in World War II, the
shoe factory shifted to production of the Panzerschreck anti-tank
weapon.
The families fight that created adidas and puma
Adidas and Puma may be among the most recognized brands in the
world, but neither might exist if not for a bitter rivalry between
two brothers from a little-known village in Germany. In the 1920s,
Adolf (Adi) Dassler, a softspoken sports fanatic who spent hours
working on shoe designs in his workshop, and Rudolf Dassler, a
gregarious salesman, started a small shoemaking business in the
Bavarian enclave of Herzogenaurach, focusing primarily on hand-sewn
athletic footwear. But as their business took off, the two brothers
grew increasingly frustrated with each other. They disagreed on
everything from politics, the future of the company and one
another's choice in wives.
Page 3 of 76
Finally, in the mid-1940s Rudolf left in a huff and set up a
rival shop across the river, while Adi remained in the initial
plant. His company was renamed Adidas , and in 1948 Rudolf
registered his new company, Puma. Both brothers joined the Nazi
Party, but Rudolf was slightly closer to the party. During the war,
a growing rift between the pair reached a breaking point after an
Allied bomb attack in 1943 when Adi and his wife climbed into a
bomb shelter that Rudolf and his family were already in: "The dirty
bastards are back again," Adi said, apparently referring to the
Allied war planes, but Rudolf was convinced his brother meant him
and his family. After Rudolf was later picked up by American
soldiers and accused of being a member of the Waffen SS, he was
convinced that his brother had turned him in. The brothers split up
in 1947, with
Rudi forming a new firm that he called Ruda from Rudolf Dassler,
later rebranded Puma, And Adi forming a company formally registered
as Adidas AG (with lower case lettering) on 18 August 1949. The
acronym All Day I Dream About Sport, although sometimes considered
the origin of the Adidas name, was applied retroactively, which
makes it a backronym. The name is actually a portmanteau formed
from "Adi" (a nickname for Adolf) and "Das" (from "Dassler").
Bernard Tapie, a former French businessman who onced owned
Adidas but has since relinquished his control over the company due
to debt. After a period of trouble following the death of Adolf
Dassler's son Horst Dassler in 1987, the company was bought in 1989
by French industrialist Bernard Tapie, for 1.6 billion (now 243.918
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.
Page 4 of 76
In 1992, unable to pay the loan interest, Tapie mandated the
Crdit 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.
Apparently, the state-owned bank had tried to get Tapie out of dire
financial straits as a personal favour to Tapie, reportedly because
Tapie was Minister of Urban Affairs (ministre de la Ville) in the
French government at the time. In February 1993, Crdit Lyonnais
sold Adidas to Robert Louis-Dreyfus, a friend of Bernard Tapie for
a much higher amount of money than what Tapie owed, 4.485 billion
(683.514 million) francs rather than 2.85 billion (434.479
million). Tapie later sued the bank, because he felt "spoiled" by
the indirect sale. Robert Louis-Dreyfus became the new CEO of the
company. 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 Sant prison in
Paris. In 2005, French courts awarded Tapie a 135 million
compensation (about 886 million francs). An Adidas casual shoe,
with the company's distinctive three parallel bars. 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 Worlds use was infringing because the public could
establish a link between that use and Adidas 's mark. In September
2004, top 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", and it
has been critically acclaimed. Also in 2005, on 3 May, Adidas told
the public that they sold their partner company Salomon Group for
485m to Amer Sports of Finland. In August 2005, Adidas declared its
intention to buy British rival Reebok for $3.8 billion (US). This
takeover was completed with partnership in JanuaryPage 5 of 76
2006 and meant that the company will have business sales closer
to those of Nike in North America. The acquisition of Reebok will
also allow Adidas to compete with Nike worldwide as the number two
athletic shoemaker in the world.
Logo HistoryAdidas - a name that stands for competence in all
sectors of sport all over the world. Adidas was founded by Adolf
(Adi) Dassler, who started producing shoes in the 1920s with the
help of his brother Rudolf Dassler who later formed rival shoe
company PUMA AG. Adi Dassler's aim was to provide every athlete
with the best possible equipment. For this he followed three
guiding principles: design the best shoe for the requirements of
the sport, protect the athlete from injury, and make the product
durable. Today, the Adidas brand product range extends from shoes,
apparel and accessories for basketball, soccer, fitness and
training to adventure, trail and golf. The company's clothing and
shoe logo designs typically feature three parallel stripes, and
this same motif is incorporated into Adidas 's current official
logo. For years the only symbol associated with Adidas was the
trefoil (flower) logo design. The 3 leaves symbolize the Olympic
spirit, linked to the three continental plates as well as the
heritage and history of the brand. The "Trefoil" was adopted as the
corporate logo design in 1972. In 1996, it was decided that the
Trefoil corporate identity would only be used on heritage products.
Examples of products featuring the Trefoil logo design include the
Stan Smith, Rod Laver, A-15 Warm-Up, and Classic T-Shirt. In
January 1996, the Three-Stripe brand mark became the worldwide
Adidas corporate logo. This logo represents performance and the
future of the Adidas branding identity. It has become synonymous
with Adidas and its dedication to producing high-quality athletic
products to help athletes perform better. The 3-Stripes mark is
without doubt the quintessential Adidas symbol. It was created by
the Adidas company founder, Adi Dassler, and first used on footwear
in 1949. Dassler created a symbol that could be immediately
recognized when his footwear was used in athletic competition and
associated with Adidas . He emphasized the association with the
slogan The Brand with the 3 Stripes. The 3-Stripes were first used
on apparel in 1967. The 3-Stripes now enjoy worldwide recognition
as an Adidas symbol.
Page 6 of 76
In the late 60s Adidas expanded into the leisure and apparel
sector, and this prompted Kthe and Adi Dassler to seek a new,
additional identification mark for the Adidas brand. In August
1971, the Trefoil was born, out of more than 100 ideas. Inspired by
the 3-Stripes, it is a geometric execution with a triple
intersection, symbolizing the diversity of the Adidas brand. This
symbol was first used on Adidas products in 1972, and later became
the companys corporate symbol. Today it plays the important role of
representing the Adidas Originals collection.
In 1997, Adidas decided to introduce an integrated corporate
design, choosing as the core element a new and yet familiar logo:
the 3 bars. It was designed in 1990 by the then Creative Director
Peter Moore, and initially used on the Equipment range of
performance products. It is inspired by the 3-Stripes as they
appear on footwear. The shape formed by the bars also represents a
mountain, indicating the challenge to be faced and the goals to be
achieved.
In August 1998, following the merger of Adidas and Salomon, the
then named Adidas Salomon AG introduced a new corporate logo. The
logo unites the values of the brands of the Group, incorporating
the typical colours of the two previous groups: blue for Adidas ,
red for Salomon. The logo shows three shapes coming together to
form a larger shape, namely a diamond. The space between the shapes
forms another shape that of a person with arms rose in victory and
celebration. This logo appeared on all corporate documents of the
then named Adidas -Salomon AG, but not on products.
In July 2002, Adidas Salomon AG presented a revolutionary new
business strategy for the Adidas brand, aimed at expanding its
customer base and driving top-line growth. The new structure marked
a fundamental shift from the traditional Footwear and Apparel
structure, introducing a new threedivisional approach with the
Sport Performance, Sport Heritage and Sport Style divisions.
Page 7 of 76
The products in the Adidas Sport Performance division are
developed for the sports performance market but have design appeal,
encouraging consumers to wear the products both on and off the
court or playing field. The Adidas Sport Heritage division contains
Adidas Originals products. Originals products seek to extend the
Adidas brands unique and authentic heritage to the lifestyle
market. Design and functionality are already strong aspects of the
two existing Adidas divisions and are continued with an even
stronger focus in the new Sport Style division.
Adidas Sport Style - the future in sportswear designed by Yohji
Yamamoto is an exclusive collection, consisting of mens and womens
footwear, apparel and accessories. It combines the mission of the
sports brand with the vision of style to develop an unexpected and
radical appeal. Yohji Yamamoto: For me, this is an interesting and
exciting new project on many levels. And, I always wanted my
clothes to be accessible to and desired by a greater number of
people, and I feel that it will be possible for me to achieve this
through this new line. In 2007, the Sport Heritage and Sport Style
divisions merged into a single Sport Style division. The logos of
the two divisions remain visible on the respective collections.
The corporate logo changed after the divestiture of Salomon in
October 2005. The new logo of the Adidas Group was launched in
April 2006. The Adidas Group logo is the umbrella under which all
Group-owned brands stand. It brings Adidas back to its roots by
using the familiar Adidas wordmark as a visual identity to the
business community, strengthening image and impression.
Page 8 of 76
From a design perspective, the new logo is simple, clear, and
confident and shows leadership. It will support future business
growth and is flexible enough to anticipate any unforeseen changes.
At the same time the Adidas brand received a new logo to
incorporate the divisions Sport Performance and Sport Style.
Group Strategy
Their goal as a Group is to lead the sporting goods industry
with brands built upon a passion for sports and a sporting
lifestyle. Inspired by their heritage, they know that a profound
understanding of the consumer and customer is essential to
achieving this goal. To anticipate and respond to their needs, they
continuously strive to create a culture of innovation, challenging
ourselves to break with convention and embrace change. By
harnessing this culture, they push the boundaries of products,
services and processes to strengthen their competitiveness and
maximize the Groups operational and financial performance. This, in
turn, will drive long-term value creation for their
shareholders.
Page 9 of 76
Financial Calendar 2010
2009 Full Year Results Analyst and press conferences in
Herzogenaurach, Germany Press release, conference call and webcast
First Quarter 2010 Results Press release, conference call and
webcast Annual General Meeting Frth (Bavaria), Germany Webcast
Dividend paid (Subject to Annual General Meeting approval) First
Half 2010 Results Press release, conference call and webcast Nine
Months 2010 Results Press release, conference call and webcast
March 3, 2010
May 4, 2010
May 6, 2010
May 7, 2010
August 4, 2010
November 4, 2010
Page 10 of 76
Financial Highlights
2009 Operating Highlights ( in millions) Net sales EBITDA
Operating profit Net income attributable to shareholders Key Ratios
(%) Gross margin Operating expenses as a percentage of net sales
Operating margin Effective tax rate Net income attributable to
shareholders as a percentage of net sales Operating working capital
as a percentage of net sales1) Equity ratio Financial leverage
Return on equity Balance Sheet and Cash Flow Data ( in millions)
Total assets Inventories Receivables and other current assets
Working capital Net borrowings Shareholders equity Capital
expenditure Net cash from operating activities Per Share of Common
Stock () Basic earnings Diluted earnings Operating cash flow
Dividend 10,381 780 508 245
2008 10,799 1,280 1,070 642
Change (3.9%) (39.1%) (52.6%) (61.8%)
45.4% 42.3% 4.9% 31.5% 2.4%
48.7% 40.5% 9.9% 28.8% 5.9%
(3.3pp) 1.7pp (5.0pp) 2.7pp (3.6pp)
24.3% 42.5% 24.3% 6.5%
24.5%
(0.2pp)
35.5% 7.0pp 64.6% (40.3pp) 18.9% (12.4pp)
8,875 1,471 2,038 1,649 917 3,771 240 1,198
9,533 1,995 2,523 1,290 2,189 3,386 380 497
(6.9%) (26.3%) (19.2%) 27.8% (58.1%) 11.3% (36.8%) 140.9%
1.25 1.22 6.11 0.352)
3.25 3.07 2.52 0.50
(61.5%) (60.2%) 142.6% (30.0%)
Page 11 of 76
Share price at year-end Other (at year-end) Number of employees
Number of shares outstanding Average number of shares
37.77
27.14
39.2%
39,596 38,982 209,216,186 193,515,512 196,220,166
197,562,3463)
1.6% 8.1% (0.7%)
Retail at a glance in millions2009 2008 Change Net sales 1,906
1,738 10% Gross profit 1,116 1,069 4% Gross margin 58.6% 61.5%
(2.9pp) Segmental operating profit 267 326 (18%) Segmental
operating margin 14.0% 18.8% (4.8pp)
Net sales by product category in millionsFootwear 2,978 4,733
4,751 4,919 4,642 Apparel 2,798 4,105 4,426 4,775 4,663 Hardware
860 1,246 1,121 1,105 1,076 Total 6,636 10,084 10,299 10,799
10,381
2005 2006 2007 2008 2009
Page 12 of 76
2009 net sales by product category
Major locations
EUROPE Adidas Group Headquarters, Herzogenaurach, Germany Adidas
International Finance, Amsterdam, Netherlands Adidas International
Trading, Amsterdam, Netherlands Adidas Group Russia, Moscow, Russia
NORTH AMERICA Adidas North America, Portland/Oregon, USA Reebok
International Headquarters, Canton/Massachusetts, USA The Rockport
Company Headquarters, Canton/Massachusetts, USA ReebokCCM Hockey
Headquarters, Montreal/Quebec, Canada TaylorMadeAdidas Golf
Headquarters, Carlsbad/California, USA Sports Licensed Division
Headquarters, Canton/Massachusetts, USA ASIA Adidas Group Asia,
Hong Kong, China LATIN AMERICA Adidas Group Latin America, Panama
City, Panama
01 02 03 04
05 06 07 08 09 10
11
12
Established as a brand in 1948 in Germany, Adidas runs 22 stores
in the US, and 398 stores in the rest of the world.
Page 13 of 76
Adidas outsourcing strategyIf the success of Nike brand,
marketing, logistics, combined with the embodiment, then the Adidas
brand strategy is not very good in the case of winning margin since
the success of cost savings in the supply chain that reflects most
vividly. Adidas and Nike are not the same logistics strategy. Nike
after long-term development, has established a good logistics
infrastructure, using its own logistics system. The Adidas through
cost accounting, chose outsourcing their logistics operations,
which the logistics system, its not perfect, no doubt, reduce
operating costs. Back in 1996, Adidas has decided to apparel
distribution business in the United States to the UPS global
logistics outsourcing company. A year later, another with CALIBER
logistics companies, outsourcing distribution of sports shoes.
Adidas has always insisted the international logistics companies to
cooperate with these companies so that Adidas had a good benefit,
not only significant savings in cost and improved logistics service
quality, rapid delivery of its products to customers. Although the
distribution link in outsourced logistics company, logistics
management, production processes on the same can not be ignored. In
the new century, sports goods nike air tairwind 2010 companies
increasingly sensitive to cost. As the supply is very large, small
changes in unit costs will lead to significant changes in the total
cost. Especially with the fierce market competition, sports brand,
style replacement soon, sports apparel and footwear sales life
cycle has been shortened to 3 months. Faced with this situation,
the production and supply chain is particularly important. nike air
max tn Adidas has maintained a research and development and foundry
interaction, direct that R & D foundry business process, saving
time between R & D and production distance. R & D in
logistics outsourcing and OEM basis of interaction, Adidas protect
its supply chain strategy for winning. Outsourcing of logistics for
the expansion of markets,nike air max 90 especially in a high
demand market coverage is very important for the industry. The
rapid development of the brand in the global movement for nearly 20
years, Adidas has also accelerated its supply chain, the pace of
outsourcing of logistics resource integration. After the
acquisition of Reebok in the United States, this outsourcing on the
global supply chain logistics integration into the global market
tool for Adidas. We can see thatPage 14 of 76
Adidas logistics outsourcing strategy to expand its market
played a key role. Footwear should be changed regularly. nike air
force 1 one Because the "maturity" of the shoes may not provide
enough support or shock absorption. When your shoes too much inward
or outward tilt, the instructions to the replacement of their time.
If the soles wear, and also the renewal shoes. Running shoes should
be about 300 to 400 miles for each one. Shoes were worn in the
bottom sandwich on the cause of chronic foot injury, in addition,
sole sandwich need recovery time, if you run every day, or a
walking enthusiast, you'd better have two pairs of shoes rotations
give them some rest time.
Adidas announce strategic outsourcingWhen Brazilian striker Lus
Fabiano commented: "Its supernatural! All of a sudden it changes
trajectory on you! he was speaking of the Adidas Jubulani football.
He might, however, have been speaking of the HR Strategy of the
Adidas Group, who have just announced that they are reversing their
earlier strategy of outsourcing recruitment, and have decided to
bring the activity back in-house and in doing so save up to almost
5m in headhunter and advertising costs. Adidas moves recruitment
in-house to save 6m a year Isnt it fascinating and ironic that the
alleged benefits of the majority of outsourcing initiatives are
cost reduction and improved service delivery but, almost without
exception, whenever an organisation elects to insource an activity
it is for exactly the same reason. A quick browse through one of
the most popular HR textbooks will reveal comments such as:
Outsourcing appears to encourage the measurement of the value of HR
and it is suggested that this comes about through the need for
service-level agreements and key performance indicators with a
greater focus on customer
Page 15 of 76
satisfaction. Outsourcing allows the internal HR function to
concentrate on driving the direction of HR rather than carry out
more mundane tasks. Certainly in the case of Adidas, reducing costs
and improving processes are specifically quoted as reasons for this
major decision. Where cost is uppermost, its not always HR that is
calling the tune. As the sadly-departed Marcia Roberts (former
Chief Executive of the Recruitment and Employment Confederation)
warned.
Corporate responsibility Strategy 2010The adidas Group's social
and environmental strategy 2008-2010 has been built on the
achievements and experiences from previous years. It responds to
changes in our overall business development and to feedback that we
have captured from stakeholders. Our strategy defines primary areas
which are core to our business and where we dedicate our attention,
efforts and resources. These areas are: Embedding environmental
sustainability across our business - this recognises the urgent
need to address questions of resource use, environmental
degradation and climate change, 'the' business drivers for the 21st
Century Effectively managing business risks and social compliance
in our supply chain - the supply chain is expanding, and becoming
more complex with multiple relationships and stretched lines of
communication and control Extending our engagement internally and
externally - partnering with others to embed new thinking and
better ways of working within our business and along our supply
chain. The issues are so large and complex that we cannot solve
them alone Creating the best and most productive workplace in the
industry by becoming a champion in talent and succession
management, a worldclass recruiter and a Top 10 employer in every
key market in which we operate. More detailed targets for each of
these core areas were defined for 2008 and published in our 2007
Social and Environmental Report. In the present report you can read
about our progress against these targets.
Page 16 of 76
Key focus areas
Core area Environmental sustainability
Topic Product Production Own sites Direct supply chain Indirect
supply chain Business entities Global economic crisis Internal
External
Goal 'The right choice' 'Partner for change' 'Lead by example'
'Drive self-governance' 'Control and manage risks' 'Drive
accountability' 'Transparent management'
Supply chain
Stakeholder engagement
'Drive integration and embedded thinking' 'Partner for change,
transparency and accountability' 'To be a champion in succession
planning' 'To be a world-class recruiter' 'To be a Top 10 employer
of choice in every key market in which we operate.'
Employees
Succession planning Recruitment Employer of choice
Page 17 of 76
Ten-year overview
2009 Income Statement Data ( in millions) Net sales Gross profit
Royalty and commission income Other operating income Other
operating expenses EBITDA Operating profit Financial result Income
before taxes Income taxes Minority interests Net income
attributable to shareholders Income Statement Ratios Gross margin
Operating margin Interest coverage Effective tax rate Net income
attributable to shareholders as a percentage of net sales Sales by
Brand ( in millions) Adidas
2008
2007
2006
2005
2004
2003
2002
2001
2000
10,38 1 4,712 86
10,79 9 5,256 89
10,29 9 4,882 102
10,08 4 4,495 90
6,636 3,197 47
5,860 2,813 42
6,267 2,814 42
6,523 2,819 46
6,112 2,601 42
5,835 2,528 43
100
103
80
55
36
n/a
n/a
n/a
n/a
n/a
4,390
4,378
4,115
3,759
2,573
n/a
n/a
n/a
n/a
n/a
780 508 (150) 358 113 0 245
1,280 1,070 (166) 904 260 (2) 642
1,165 949 (135) 815 260 (4) 551
1,078 881 (158) 723 227 (13) 483
806 707 (52) 655 221 (8) 383
716 584 (59) 526 193 (7) 314
652 490 (49) 438 167 (11) 260
622 477 (87) 390 148 (14) 229
620 475 (102) 376 147 (21) 208
578 437 (94) 347 140 (25) 182
45.4 % 4.9% 3.9 31.5 % 2.4%
48.7 % 9.9% 7.4 28.8 % 5.9%
47.4 % 9.2% 6.8 31.8 % 5.4%
44.6 % 8.7% 5.9 31.4 % 4.8%
48.2 % 10.7 % 18.4 33.7 % 5.8%
48.0 % 10.0 % 10.2 36.7 % 5.4%
44.9 % 7.8% 8.4 38.0 % 4.2%
43.2 % 7.3% 6.4 37.9 % 3.5%
42.6 % 7.8% 4.9 39.0 % 3.4%
43.3 % 7.5% 4.6 40.3 % 3.1%
7,520
7,821
7,113
6,626
5,861
5,174
4,950
5,105
4,825
4,672
Page 18 of 76
Reebok Taylor MadeAdidas Golf Rockport Reebok-CCM Hockey Balance
Sheet Data ( in millions) Total assets Inventories Receivables and
other current assets Working capital Net borrowings Shareholders
equity Balance Sheet Ratios Net borrowings/EB ITDA Financial
leverage Equity ratio Equity-tofixed-assets ratio Asset coverage I
Asset coverage II Fixed asset intensity of investment Current asset
intensity of investment Liquidity I Liquidity II Liquidity III
Working capital turnover Return on equity Return on capital
employed Data Per Share
1,603 831 232 177
1,717 812 243 188
1,831 804 291 210
1,979 856 293 202
709
633
637
707
545
441
8,875 1,471 2,038
9,533 1,995 2,523
8,325 1,629 2,048
8,379 1,607 1,913
5,750 1,230 1,551
4,434 1,155 1,425
4,188 1,164 1,335
4,261 1,190 1,560
4,183 1,273 1,520
4,018 1,294 1,387
1,649 917 3,771
1,290 2,189 3,386
1,522 1,766 3,023
1,733 2,231 2,828
2,644 (551) 2,684
1,336 665 1,544
1,433 1,018 1,285
1,445 1,498 1,081
1,485 1,679 1,015
1,417 1,791 815
1.2
1.7
1.5
2.1
(0.7)
0.9
1.6
2.4
2.7
3.1
24.3 % 42.5 % 85.9 % 137.4 % 102.9 % 49.5 % 50.5 % 30.0 % 80.4 %
132.2 % 6.3
64.6 % 35.5 % 73.6 % 127.7 % 89.1 % 48.2 % 51.8 % 10.5 % 55.1 %
109.8 % 8.4
58.4 % 36.3 % 72.2 % 136.1 % 98.0 % 50.3 % 49.7 % 14.5 % 70.3 %
132.6 % 6.8
78.9 % 33.8 % 63.5 % 138.7 % 102.0 % 53.2 % 46.8 % 15.8 % 80.4 %
153.7 % 5.8
(20.5 %) 46.7 % 194.0 % 284.1 % 150.4 % 24.1 % 75.9 % 92.0 %
148.0 % 219.4 % 2.6
43.1 % 34.8 % 110.4 % 194.1 % 106.3 % 31.6 % 68.4 % 26.8 % 88.4
% 156.4 % 4.4
79.2 % 30.7 % 91.1 % 197.6 % 108.3 % 33.7 % 66.3 % 20.8 % 100.8
% 187.4 % 4.4
138.5 % 25.4 % 75.4 % 196.9 % 107.6 % 33.7 % 66.3 % 5.5% 99.1 %
185.3 % 4.5
165.5 % 24.3 % 77.8 % 209.3 % 105.9 % 31.2 % 68.8 % 6.1% 96.0 %
187.4 % 4.1
219.6 % 20.3 % 66.2 % 207.7 % 101.3 % 30.7 % 69.3 % 7.7% 90.4 %
185.0 % 4.1
6.5% 11.3 %
18.9 % 19.8 %
18.2 % 20.2 %
17.1 % 17.6 %
14.3 % 49.3 %
20.4 % 27.5 %
20.2 % 22.1 %
21.1 % 16.8 %
20.5 % 16.7 %
22.3 % 17.0 %
Page 19 of 76
Share price at year-end (in ) Basic earnings (in ) Diluted
earnings (in ) Price/earnings ratio at yearend Market
capitalization at year-end ( in millions) Operating cash flow (in )
Dividend (in ) Dividend payout ratio (in %) Number of outstanding
shares at year-end (in thousands) Employees Number of employees at
2) year-end Personnel expenses ( in millions)
37.77 1.25 1.22 31.0
27.14 3.25 3.07 8.8
51.26 2.71 2.57 19.9
37.73 2.37 2.25 16.8
40.00 2.05 1.93 20.7
29.69 1.72 1.64 18.1
22.58 1.43 1.43 15.8
20.58 1.26 1.26 16.3
21.08 1.15 1.15 18.3
16.50 1.00 1.00 16.5
7,902
5,252
10,43 8
7,679
8,122
5,446
4,104
3,738
3,823
2,993
6.11
2.52
3.83
3.74
1.88
3.17
3.58
2.94
2.12
(0.06)
0.357)
0.50 15.1
0.50 18.0
0.42 17.7
0.33 17.2
0.33 18.9
0.25 17.5
0.25 19.8
0.23 20.0
0.23 22.9
29.8
209,2 16
193,5 16
203,6 29
203,5 37
203,0 47
183,4 36
181,8 16
181,6 92
181,3 96
181,3 96
39,59 6 1,352
38,98 2 1,283
31,34 4 1,186
26,37 6 1,087
15,93 5 706
14,25 4 637
15,68 6 709
14,71 6 758
13,94 1 695
13,36 2 630
Major Promotion Partnerships 2010The Adidas Group sells products
in virtually every country around the world. As at December 31,
2009, the Group had 177 subsidiaries worldwide with our
headquarters located in Herzogenaurach, Germany; Our Group has also
assembled an unparalleled portfolio of promotion partnerships
around the world, including sports associations, events, teams and
individual athletes. Our Groups most important locations and
upcoming sporting events are highlighted on the world map.
Page 20 of 76
Orange Africa Cup of Nations 2010, Angola January 10 31, 2010
Adidas Official Match Ball Supplier EHF Handball EURO 2010, Austria
January 19 31, 2010 Adidas Official Partner of European Handball
Federation NFL Super Bowl, Miami/Florida, USA February 7, 2010
Reebok Official Outfitter of National Football League NBA All-Star
Game, Dallas/Texas, USA February 14, 2010 Adidas Official Outfitter
of National Basketball Association IAAF Indoor World Championships,
Doha, Qatar March 12 14, 2010 Adidas Official Partner Boston
Marathon, Boston/Massachusetts, USA April 19, 2010 Adidas Official
Apparel and Footwear Outfitter Flora London Marathon, London, UK
April 25, 2010 Adidas Official Sponsor UEFA Europa League Final,
Hamburg, Germany May 12, 2010 Adidas Official Match Ball Supplier
ICC World Twenty20, West Indies April 30 May 16, 2010 Adidas
Official Supplier of Australia and England cricket teams UEFA
Champions League Final, Madrid, Spain May 22, 2010 Adidas Official
Ball Supplier for UEFA Champions League French Open, Paris, France
May 23 June 6, 2010 Adidas Official Partner of Roland Garros 2010
FIFA World Cup, South Africa June 11 July 11, 2010 Adidas Official
Partner of Fdration Internationale de Football Association,
Official Match Ball Supplier of FIFA MLB All-Star Game,
Anaheim/California, USA July 13, 2010
A
B
C
D
E
F
G
H
I
J
K
L
M
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Reebok Official Licensee of Major League Baseball fan and
lifestyle apparel and Official Authentic Collection Footwear
Supplier UEFA Super Cup, Monaco August 27, 2010 Adidas Official
Match Ball Supplier 2010 FIBA World Championship, Turkey August 28
September 12, 2010 Adidas Official Supplier real, Berlin Marathon,
Berlin, Germany September 26, 2010 Adidas Official Partner P O
N
Apparel Product of Adidas
Men's
Page 22 of 76
Ladies
Kids
Page 23 of 76
REEBOKReebok was founded in 1895 in Bolton, England by J.W.
Foster. In its first incarnation, the company was called simply
J.W. Foster and Sons. Fosters goal was simple: make a running shoe
that enabled athletes to run faster. His solution was to add spikes
to the bottom of the sole at a time when very few shoemakers were
employing this technology.
Fosters clientele was elite. He designed shoes for top athletes
around the world. In fact, several athletes at the 1924 Olympic
Summer Games were wearing shoes designed by J.W. Foster and Sons.
J.W. Foster and Sons did not become Reebok until 1958 when Joe and
Jeff Foster (J.W.s grandsons) rechristened the company. Reebok is
the Afrikaans spelling of reebok, which is a kind of African
antelope. The spelling was somewhat of an accident. Joe and Jeff
found the word in a South African dictionary that Joe had won as a
child. The shoes were not available to the American market until
1979 when the American Paul Fireman ran across Reebok shoes at an
international trade show. When Reeboks were first released in the
United States, they cost 60 dollars and were the most expensive
running shoes being sold at that time. Reebok really took off in
the 1980s when womens athletic footwea r hit the market. While
companies like Nike still dominated Reebok when it came to running
shoes, Reebok was the lion among the competitors when it came to
aerobics. The Reebok Freestyle was released in 1982 (high-top
version in 1985), and it quickly became a cultural sensation. The
male version of the Freestyle, dubbed the Ex-O-Fit, followed soon
after. With bright colors and Velcro straps, the Freestyle and
Ex-O-Fit helped to define 80s fashion. During the 1980s Reeboks
popularity exploded into international markets, with the brand
ultimately becoming available in over 170 countries. In the
lastPage 24 of 76
decade, Reebok has made partnerships with the National Football
League, the National Basketball Association and the National Hockey
League. Spokespersons for the brand included the likes of Jay-Z,
Lucy Liu and Allen Iverson. In January 2006, Reebok was bought out
by adidas and became a subsidiary of the company. Adidas, which was
formally one of the biggest competitors of Reebok, paid $3.8
billion. Later that year in November the National Basketball
Association and Womens National Basketball Association decided to
replace Reebok branding on their merchandise with adidas because
adidas is better known outside of US and UK markets than
Reebok.
Reebok runs their business with six individual logos
Page 25 of 76
Reebok Strategy and Focus Areas
In 2009, the Reebok brand has continued to execute its strategy,
positioning itself as a premium sports and lifestyle brand focused
on fitness and training. Based on its roots and heritage in
fitness/training, consumer insights and positioning within the
adidas Group, Reebok developed a clear roadmap for its key
businesses going forward: Own Womens Fitness, Challenge in Mens
Training/Sport and Revive Classics. Central to Reeboks brand
heritage is the courage to challenge convention. Unlike many other
brands, Reebok is committed to make fitness fun again challenging
men and women to fulfil their potential in sport and in life by
providing them with the opportunity, the products and the
inspiration to have fun staying in shape.
Womens fitness
Reebok is on a mission to make fitness fun again for women. The
brands commitment to womens fitness is long-standing. It introduced
Step Reebok inPage 26 of 76
1989 and was at the forefront of the aerobics movement of the
1980s. This heritage and credibility has connected women to Reebok
in a powerful way, and serves as the cornerstone for the brands
business expansion. In 2009, the brand has accelerated its womens
programmes, introducing new partnerships and products and once
again reaffirming its support of womens health and fitness whether
its out of the gym, in the gym or for a cause.
ReeTone: Women are busy and dont always find the time to fit in
their daily workout. Based on this relevant consumer need, in 2009,
Reebok launched the EasyTone footwear collection that allows
consumers to take the gym with them. EasyTone is based on Reeboks
proprietary moving air technology. It involves two balance pods
under the heel and forefoot of the shoes that create natural
instability with every step, forcing the muscles to adapt and
develop tone. Building on the huge success of E asyTone in 2009,
Reebok will launch an integrated marketing campaign around the
world in 2010 under the motto of ReeTone. Reebok is also expanding
its footwear offering into the running and training category,
launching RunTone and TrainTone in 2010. ReeGym: Through Reeboks
partnership with Cirque du Soleil, the brand will continue to
develop new inspiring workout experiences and product collections
to strengthen its position in the gym. The overriding aim of this
collaboration is not just to create physically demanding workout
routines, but to create exercises that are fun, unique and
enjoyable. In spring 2009, Reebok and Cirque du Soleil launched
JUKARI Fit to Fly, taking inspiration from the theatrical and
physically demanding artistry of Cirque du Soleil. Building on
this, in 2010 Reebok and Cirque du Soleil are launching JUKARI Fit
to Flex a workout that enhances flexibility and muscle tone with
the help of a specifically designed JUKARI band. The JUKARI
training experience is accompanied by a fully integrated womens
fitness range, the Reebok Cirque du Soleil collection, which
combines the performance demands of the workout with the creativity
of Cirque du Soleil. In addition, Reebok launched the On The Move
collection of apparel and footwear, created for the needs of a
womans busy lifestyle. The collection is versatile and able to be
mixed and matched in or out of the gym.
Page 27 of 76
Challenge in mens sport
Reebok is also a well-recognised mens sports and training brand,
a result of its innovative products and its long-standing
partnerships with several of the worlds top athletes, professional
leagues and teams. Given Reeboks close collaboration with athletes,
the brand has a clear understanding of athletes training needs. The
primary focus is on creating versatile products that help athletes
prepare for their sport irrespective of the discipline. For 2010,
the brand is accelerating its mens training efforts, introducing
two key initiatives.
ReeZig: In spring 2010, Reebok will introduce ZigTech, a
completely new training shoe for endurance sports like running and
agility sports. In product testing, a host of enthusiastic athletes
and consumers confirm that ZigTech is not only visually striking,
but more importantly it addresses an unmet need of fitness runners
and athletes. This need is to get more out of their workout and
reduce wear and tear thus allowing them to enhance their lifetime
as an athlete. By maximising energy transfer through its zigzag
geometry back to the actual running stride, this shoe allows the
wearer to train longer, faster and healthier. This is achieved as
the unique energy and cushioning system reduces stress on muscles
by up to 20%, therefore reducing wear and tear on the runners body.
The introduction of ZigTech will be supported by an integrated
global marketing campaign ReeZig featuring key athletes from
Reeboks roster with major launches planned to coincide with global
event milestones such as the Super Bowl. ReeTrain: In 2010, Reebok
will introduce a complete range of strength training products for
men based on its muscle toning platform of moving air. Air-filled
pods under the heel and forefoot of the shoes create a natural
instability with every step, forcing the muscles to adapt and work
harder. This allows the consumer to get more out of their workout.
The offering includes EasyTone for walking and casual wear,
TrainTone for training exercises and the gym, RunTone for running
and JumpTone, helping to strengthen key leg muscles and thus
allowing athletes to improve their vertical leap.
Page 28 of 76
Reebok-CCM Hockey Strategy
Reebok-CCM Hockey is one of the worlds largest designers,
manufacturers and marketers of hockey equipment and related apparel
under two of the most recognised hockey brand names: Reebok Hockey
and CCM Hockey. Reebok-CCM Hockey equips more professional hockey
players than any other company, including NHL superstars such as
Sidney Crosby and Alexander Ovechkin. Reebok-CCM Hockey is also the
official outfitter of highprofile leagues such as the National
Hockey League as well as several NCAA and national teams.
Reebok-CCM Hockeys strategy is to increase market share by
leveraging its multi-brand approach to speak to different consumer
groups, supported by its dedication to innovate for the leading
athletes in the sport.
Focus on high-end performance
Reebok-CCM Hockey has a dual brand portfolio consisting of
Reebok Hockey and CCM Hockey. Reebok Hockey is a global brand that
celebrates individuality in sport and in life. Its products are
designed with emphasis on innovative visible technologies that
speak to a more expressive, imageconscious consumer. CCM Hockey is
hockeys most authentic brand, being in existence since 1899. CCM
Hockey embraces the physical side of the game and is all about guts
and glory. The brand speaks to a consumer seeking performance and
quality. Reebok-CCM Hockeys primary focus is to lead in the
high-end performance segment of the hockey market. Continued
success in the hockey market will be driven through a concerted
focus on product innovation, supported by professional player
validation achieved by having the best athletes in the world play
with Reebok-CCM Hockey products. Differentiated marketing and brand
campaigns are targeted towards the intended consumer segment, for
example players or fans. In-arena andPage 29 of 76
partnership-based marketing programmes, consumer campaigns and
webbased initiatives are designed to create brand exposure,
creating demand for Reebok-CCM Hockey products.
Product innovation matches brand positioningThe key priority for
Reebok-CCM Hockeys innovation team is to design, develop and
industrialise products that are targeted to be visibly different
and demonstrably better than that of the competition, with a
dedication to providing elite athletes with high-performance
products. With its emphasis on continued product innovation,
products incorporate proprietary patented technological advances
under both brands within the Reebok-CCM Hockey portfolio. Reebok
Hockeys Pump Skates, O-Sticks and the Edge Uniform exemplify the
brands breakthrough technologies. CCM Hockeys product innovation
story is led by its U+ Skate, the only truly customisable skate in
the market, and the U+ Stick, the lightest performance stick in the
world.
Professional player validationReebok-CCM Hockey recognises that
success with the consumer is heavily influenced by exposure
generated at the Pro League level. Product usage by the best
players in the game validates Reebok-CCM Hockeys product
performance credentials, and both brands are highly visible among
professional hockey leagues worldwide. The strongest league
partnerships: Reebok-CCM Hockey has the strongest league
partnerships within the industry. It is the exclusive licensee of
jerseys for the National Hockey League (NHL), the American Hockey
League (AHL), the ECHL, the Canadian Hockey League (CHL) and many
of the European National (5) and Elite League (33) teams. 99% of
all NHL players wear at least one piece of Reebok or CCM Hockey
equipment. Reebok-CCM Hockey is also the official equipment
supplier of the AHL, the CHL and the ECHL.Page 30 of 76
Impressive roster of Pro Player endorsees: Reebok-CCM Hockey has
formed endorsement partnerships with many of the best athletes in
the world. With manufacturing capabilities close to the worlds
major leagues, the two brands can respond rapidly with customised
solutions. This provides a strong competitive advantage in
attracting key pro athletes. The Reebok Hockey brand is currently
endorsed by NHL players such as Sidney Crosby, Pavel Datsyuk,
Roberto Luongo and Marc-Andre Fleury. CCM Hockeys roster of player
endorsees includes Alexander Ovechkin, Joe Thornton and Vincent
Lecavalier. In 2009, Reebok-CCM Hockey made an unprecedented move
in the hockey world by signing the three top overall NHL Draft
picks John Tavares (CCM Hockey), Matt Duchene (Reebok Hockey) and
Victor Hedman (Reebok Hockey).
Increase profitability through supply chain efficiencies
Another strategic priority for Reebok-CCM Hockey is to continue
to pursue a movement away from own manufacturing to sourcing goods.
However, the segment will maintain manufacturing activities in
areas where it is a distinct competitive advantage to do so, such
as is the case for performance products destined for pro level
athletes.
Product education programmes to support retail partners
Reebok-CCM Hockey provides its strategic retail partners with
product education programmes, in-store merchandising programmes and
on-the-floor staff support. Reebok-CCM Hockey develops retail
segmentationPage 31 of 76
programmes that help create differentiated packages for its key
accounts. Core distribution channels include hockey specialty
shops, sporting goods retailers and in-arena concessions.
Pricing strategy mirrors product positioningReebok-CCM Hockeys
pricing strategy is consistent with its positioning as a
high-performance company. Through a commitment to product
innovation, Reebok-CCM Hockeys pricing strategy is to dominate the
market in the premium price segments and to be a strong competitor
within the mid-price segment of the market.
Key strategic categories to drive growth
Reebok-CCM Hockey intends to accomplish growth through a
continuous stream of product launches in its three key category
priorities: skates, sticks and apparel. Skates: The focus in the
skate category is to drive market share increases through the
creation of products that continue to address critical aspects such
as fit, weight and durability. For example, in 2010, a new line of
Reebok Hockey branded skates, 11K Pump, is being launched,
featuring an advanced fit element. This new skate line was also
designed with a clear focus to incorporate lightweight and durable
materials. In 2011, CCM Hockey plans to launch the next generation
of its U+ platform which features a fully thermo formable skate. In
addition to the aforementioned launches, projects within the
advanced product development group will continue to drive
innovation in subsequent years. Sticks: To drive future growth in
the sticks category, Reebok-CCM Hockey focuses on developing new
technologies that incorporate enhanced power,Page 32 of 76
feel, flexibility and weight. The Reebok 8.0.8 O-Stick features
proprietary, highly visible O-Port technology, providing players
with a more powerful and accurate shot. The CCM U+ CL stick is the
lightest performance stick in the marketplace and provides players
with an optimised balance and feel. Apparel: Reebok-CCM Hockey will
strive to further leverage its league partnerships and exclusive
uniform status to drive growth. The Reebok Edge NHL Jersey features
a four-way Stretch Mesh to provide players with maximum ventilation
and range of motion. In addition to official uniforms, Reebok-CCM
Hockey also has opportunities to grow due to its status as the
official NHL locker room performance apparel supplier, and its
exclusive rights related to the NHL Players Association (NHLPA) for
name and numbered apparel and headwear. NHL locker room performance
apparel relates to the apparel that pro athletes wear under their
jerseys during a game, or to work out and train in the gym. A key
product initiative in this area is Reebok Speedwick apparel.
Designed to feel like cotton, fabrics used in this apparel are
breathable, utilising Play Dry technology to manage moisture and
antimicrobial yarns to permanently inhibit the growth of bacteria.
The introduction of these products is supported by an integrated
global marketing campaign, ReeTrain. Key Reebok athletes such as
Lewis Hamilton will again bear testimony to Reeboks training
products. On the apparel side, Reebok will launch a versatile
collection of apparel called Training Day. Designed for the
athletes training needs, fusing sport and style influences, this
collection is able to be worn on and off the pitch. In addition,
Reeboks global mens focus on training and running will be
complemented by a select set of regional category priorities, for
example American football, baseball and lacrosse in North America,
or cricket in India. To drive future growth in these categories,
Reebok continues to develop a product and innovation strategy
concentrating on fit. In 2010, Reebok is expanding its portfolio of
fit technologies with the introduction of U-Form. Adapted from a
Reebok-CCM Hockey skate technology, U-Form is a heatactivated
customised fit system. The athlete heats the shoes (either in-store
or at home) at around 200F/90C for 3.5 minutes. He then laces the
shoePage 33 of 76
tight and relaxes for about 8 minutes as the shoe forms to the
exact shape of his foot. By contouring the shoe to the shape of the
foot, potential skin irritation is eliminated and, because of its
proper fit, the performance of the underfoot technologies are
optimised. U-Form will be available in select American football,
basketball, baseball and running shoes starting in May 2010.
Revive Classics
Although Reebok Classics was born from sport in the early 80s,
today it represents the intersection where sport meets style,
offering lifestyle footwear, apparel and accessories. In rebuilding
the Classics business, a key tenet of the strategy is to control
distribution by segmenting the product offering available for
retailers, as well as keeping a tight rein on supply. In 2009,
Reebok has continued to tightly manage its directional sport and
generalist retail channels particularly in the United States and in
Europe, with the primary aim to clean up old inventory and reduce
the brands exposure to low price points. In addition, Reebok has
launched new product initiatives in a controlled and disciplined
way. At the same time, the brand has begun to strengthen its
position in the select and trend channels with limited editions and
special projects. An example of this is Pump20 which was kicked off
in November 2009 to celebrate the 20th anniversary of The Pump.
Through a partnership with 20 select retailers around the world,
custom collaborations of The Pump were developed and exclusively
launched in select stores. To leverage its iconic sports heritage,
Reebok revives its Classics business by focusing its product range
with two priority pillars that define the Classics product
architecture: Always Classic and New Classic. Always Classic:
Always Classic products harken back to the brands roots and merge
iconic models from the 80s and 90s with new midsole/outsole
technologies. New Classic: The New Classic segment represents the
modern interpretation of Reeboks roots. Inspired by the past, New
Classic collections merge sport and style to re-energise the
category. The launch of the Womens Fly Generation collection
represents this new direction with products like the Top Down and
Courtee Mid. The marketing communication will use the brand
platform of Ree as thePage 34 of 76
guiding principle for Classics with the new messaging of
ReeClassic. The main message behind ReeClassic will be the idea of
reinterpreting Reeboks roots and will be showcased primarily
through retail and digital.
Appareal Product of Reebok
Men's
Ladies
Page 35 of 76
Kids
Page 36 of 76
ROCK PORTRockport has a globally relevant brand and product
offering with regional distribution in the United States, the
Americas, Europe, the Middle East and Asia. Its key global
priorities include: strengthen its position in the USA, establish a
regional organisation to build a foundation for the brand and drive
growth in Europe, and exploit growth opportunities in Asia,
particularly in China, India and Korea.
Rockport Strategy
Rockport is a US-based manufacturer of leather footwear. Founded
in 1971, the brand has a long history of selling walking and
comfort leather shoes for men and women. Rockports mission is to
become a leading leather footwear brand in the world through the
innovative combination of contemporary style and engineered
comfort. The leather footwear market is a large, highly attractive
market where few players have been able to achieve significant
market share. Rockports brand position in select markets and its
heritage provide a strong foundation for growth.
Leather footwear market offers significant opportunityThe
leather footwear industry is highly attractive in terms of size,
growth and profit potential. The market is estimated at over US$ 70
billion. It is currently a highly fragmented global market.
Rockport has one of the strongest brand heritages in the leather
footwear industry and has strong brand recognition, particularly in
its home market, the United States. Rockport has the opportunity to
be one of the winners in this industry by achieving sustainable,
profitable growth in the years to come.
Page 37 of 76
Global brand positioning relevant to Rockports target
consumer
Rockports brand positioning is Comfortably stylish,
contemporary, and always innovative. This positioning builds on
Rockports existing brand equity in comfort and technological
innovation while also focusing on developing a stylish and
contemporary brand through Rockports world-class, international
design resources, broad category and consumer end use coverage, and
the utilisation of three product range fashion expressions to
appeal to a large consumer base. The combination of these brand
elements attracts Rockports globally relevant main target consumer,
the metropolitan professional. The brand is currently focused
almost exclusively on the footwear category.
Focus on consistent execution of brand directionRockports brand
vision is to enable people to do more, be more, and live more. This
vision is achieved through the brands shoemaking philosophy,
Walkability, which is applied to the brands products spanning
across the dress, dress casual, relaxed casual and active casual
leather footwear categories. In 2009, Rockport continued to expand
its international distribution. The brand now does business in more
than 55 markets worldwide. Sales outside of the United States now
account for close to half of Rockports total business and
double-digit percentage growth is planned in the near term.
Page 38 of 76
Build a dual gender businessIn 2009, Rockport further
strengthened its investments in its womens product and design
teams. This investment is expected to translate into solid growth
in the womens business in 2010, with the introduction of balanced,
holistic, branded womens lines that provide the female consumer
with a value proposition that incorporates both fashion and
comfort, thereby freeing her of the need to compromise either of
these elements in her decision to purchase leather footwear.
Roll out a profitable mono-brand retail conceptRockport will
drive the global rollout of its newly created mono-brand retail
concept, whose prototypes are currently being piloted in select
markets. Based on encouraging results to date, Rockport is
accelerating the expansion of its new mono-brand retail concept in
the USA and piloting stores in additional markets in 2010.
Full-price own-retail stores are expected to comprise more than a
fifth of total sales by 2014 and are planned to be the main driver
of growth within the brand over that period.
Build effective organisational processes2009 saw increased focus
on a number of operational areas including forecasting and order
processing accuracy, lead-time reduction, product range
segmentation and productivity and supply chain complexity
reduction. In 2010, Rockport will continue its focus to improve
these and additional operational areas that are critical to the
continued success of the business.Page 39 of 76
In addition, Rockport plans to further leverage the Groups
infrastructure (e.g. in emerging markets) as a core element in
supporting its global growth strategy.
Key strategic product initiatives and innovationThe Rockport
brand continues its commitment to incorporate innovative concepts
and advanced technologies into its products. Following on the
highly successful 2009 re-launch of its DresSport 2 collection,
which marries athletic innovation and contemporary style to make it
one of the most comfortable, stylish and lightweight mens dress
shoe collections on the market, in 2010 Rockport will debut its
innovative new TruWALK product architecture. TruWALK was developed
as a result of decades of biomechanical and physiological research
and provides the wearer with a soft strike and smooth roll that
mimics the foots natural walking motion. Rockport will also
continue to leverage Group-wide resources with the continued
incorporation of industry-leading technologies such as adidas
adiPRENE and adiPRENE+ footbed technology into its products.
Page 40 of 76
Apparel Product of Rockport
Men's
Ladies
Page 41 of 76
Kids
Page 42 of 76
TAYLOR MADE GOLF CO
Taylor Made was founded by an entrepreneur named Gary Adams, who
spent as much time as he could play golf. His entrepreneurial
creation was predicated on his greatest passion, a company with
foundation that rested on a singular innovation that became a golf
industry standard. That product, the Taylor Made Metalwood, changed
the face of golfing across the globe. During the seven centuries of
golf's recorded history, the game that originated in the Scottish
Highlands underwent comparatively few technological changes. The
only equipment used to play the game--balls and clubs--remained
technologically the same for generations, and sometimes for
centuries, before a new type of ball or a new type of club gained
widespread use. From the era of the Crusades to the dawn of
industrialized society in the 19th century, the advancements in
golf equipment were few and far between. In golf's modern era, when
the number of golfers in the world rose exponentially and a new
class of golfer--the professional--competed for multimillion-dollar
purses, the speed at which technological change occurred became
decidedly swifter. Golf had evolved into big business, with
manufacturers vying for control of a market that was becoming
increasingly lucrative. Although the financial incentive for
developing a superior product was large, its size made it no easier
to obtain. Golf was a difficult game to master and a difficult game
for which to make technological improvements. Many innovations
failed miserably after their market introduction, but for those few
advancements that won over customers and met the approval of the
professional ranks, the rewards were lasting and significant.
Taylor Made was one of the handful of manufacturers able to carve a
place for itself in the golf industry with an innovative product
that earned the confidence of golfers worldwide. The credit for the
innovation fell to the company's creator, Gary Adams.
Roughly a decade before Adams began his fateful experimentation,
a surlyncovered, two-piece golf ball made its debut on the market.
The two-piece golf balls traveled farther than any ball in the
history of the sport, making it anPage 43 of 76
instant necessity for any serious golfer. Two-piece golf balls
quickly became the ball of choice for the golfing public and for
professionals alike, offering the one advantage that translated
into success in the golf equipment industry: distance. Increasing
distance was the objective Adams was pursuing when he began
tinkering in the late 1970s with different materials for making
golf clubs. Using the superior two-piece golf balls, Adams
discovered the balls traveled a greater distance when struck with a
club made out of metal than with the traditional persimmon and
laminated wood clubs used universally. The essence of his
pioneering work completed, Adams designed the first Premium
Metalwood driver and formed a company to manufacture and market his
creation, the Taylor Made Golf Co., which started in McHenry,
Illinois in 1979. The patented, stainless steel Taylor Made
Metalwood clubs were first presented to the public at the
Professional Golf Association's (PGA) Merchandise Show in 1979. Not
surprisingly, buyers at the show examined the new clubs warily.
Technological change in the golf industry occurred at a glacial
speed and, consequently, skeptics were not hard to find. For those
who tried the odd-looking clubs made by an unknown start-up
company, the reaction was positive, but for Adams to make his
fledgling company a success he knew he needed to convince a
particular type of golfer that metal drivers were superior to
conventional clubs. In the golfing world, professionals were the
ruling class, the arbitrators of success or failure for all
manufacturers. Less skilled golfers looked up to professionals,
noted the equipment they used and, more often than not, based their
purchasing decisions on the brands chosen by professional players.
Tournament victories recorded by a particular player using a
particular brand of equipment were the heart of marketing in the
golf industry. Put a manufacturer's product in the hands of a
winner and that manufacturer gained a significant advantage over
other competitors. Adams realized this fact and made it his primary
objective from the start of Taylor Made's existence. In his
company's inaugural year, Adams convinced 47 professionals
competing in the 1979 PGA Club Professional Championship to play
with Taylor Made's metal clubs. Skeptics who eyed the clubs
distrustfully at the PGA's trade show were quick to change their
perspective, as the Taylor Made brand and its unique metal clubs
achieved their first step toward legitimacy among golfing
aficionados in the United States. By the end of 1980 the company's
sales were beginning their rise, fueled by the exposure TaylorPage
44 of 76
Made Metalwoods were receiving on the national professional
circuit. Three years later anxiety stemming from whether metal
clubs would ever catch on as a widespread phenomenon within the
golf industry was no longer a concern. By 1983 Taylor Made
Metalwoods prevailed on the national tour, where an average of 60
Taylor Made clubs were in play each week and, consequently, were
highly popular items in pro shops and retail outlets across the
country. Metal, from this juncture forward, was the preferred
material used in manufacturing golf clubs. Adams's pioneering work
had taken hold.
Taylor Made has accrued six brands
Page 45 of 76
Company History
The second largest manufacturer of golf clubs in the United
States, Taylor Made Golf Co. designs and markets a complete line of
clubs for men, women, and children, as well as golf accessories and
golf bags. Taylor Made scored its initial success with its first
product, metal drivers, which debuted in 1979 and subsequently
dominated the golf market. With its focus on research and
development and aggressive marketing, the company grew to be the
second largest U.S. golf manufacturer by the mid-1990s, a ranking
attained because of the popularity of its Burner Bubble drivers,
introduced in 1995. In 1997 Adidas AG acquired Salomon, Taylor
Made's parent company, thereby creating Adidas -Salomon Group.
Taylor Made was organized as a wholly owned subsidiary of Adidas
-Salomon Group. Headquartered in Carlsbad, California, Taylor Made
had operations in Japan, Great Britain, New Zealand, and
Canada.
TaylorMade Golf Strategy
TaylorMade-adidas Golfs aim is to be the leading performance
golf company in the world in terms of sales and profitability. It
combines three of golfs most well-known and respected brands:
TaylorMade, adidas Golf and Ashworth.Page 46 of 76
The segments primary strategic pillars are to continuously
develop and commercialise innovative, technologically advanced
products while at the same time maintaining credibility through
high visibility on professional golf tours. In addition, leveraging
brand equity through the creation and execution of new marketing
and retail initiatives as well as improving global distribution are
key priorities for long-term growth. TaylorMade-adidas Golf
implements a multi-brand strategy comprised of three well-defined
golf brands under one roof. TaylorMade is the market leader in the
metalwoods category, is among the leaders in irons, and is steadily
evolving as a challenger in golf balls. adidas Golf develops
high-performance footwear and apparel for athletes who want to
maximise their physical potential in order to play the game at the
highest level. Ashworth is an authentic golf-inspired lifestyle
brand complementing adidas Golfs position, increasing the segments
presence in the golf apparel market. Combining adidas Golf and
Ashworth, TaylorMade-adidas Golf is a global leader in golf apparel
and number two in footwear.
Company Perspectives
We love to make golf clubs. This is a Taylor Made belief shared
by all our employees. The reason we love to make golf clubs is that
our values revolve around innovation, caring and being balanced. We
love product innovation and the search for building better drivers,
fairway woods, irons and putters. Innovation is respected and
valued by not only R&D and marketing, but by all our employees.
Golf is a continual quest for improvement, for that one perfect
round. At Taylor Made we have that same quest for improvement and
perfection in all our clubs.
Page 47 of 76
Innovation and technology focus
TaylorMade-adidas Golfs core objective is to create the best
performance golf products in the marketplace, and that starts with
a clear commitment to innovation and technology. The segment
therefore strives to extend its leadership position with a
continued focus on innovation and cutting-edge design while
introducing at least one major product innovation or evolution
every 12 to 18 months. In 2009, for example, TaylorMade introduced
its new R9 drivers incorporating Flight Control Technology, which
for the first time gave players the ability to easily change the
clubs face angle, loft and lie angle by adjusting a screw in the
sole. Prior to this, Tour professionals had their drivers altered
to suit their swing by having equipment technicians bend the
clubhead. This type of innovation helped the R9 achieve the
position as number one driver model on the PGA Tour and
best-selling driver model in the United States.
Tour validation as important strategic pillarGolfers of all
levels are influenced by what equipment the best professional
players in the world play with and wear. Hence, TaylorMade-adidas
Golfs leadership and presence on the worlds major professional golf
tours is imperative to increasing brand exposure and traction among
consumers. To attract the most talented players, TaylorMade-adidas
Golf offers a comprehensive service to the worlds leading players.
For example, the TaylorMade support fleet travels the PGA and
European Tours from event to event, each with a fully staffed,
state-of-the-art workshop for building and servicing drivers,
fairway woods, hybrids, irons, wedges and putters on the spot.
Today, the TaylorMade-adidas Golf Tour Staff includes high-profile
names like Sergio Garcia, Sean OHair, Yong-Eun Yang, Dustin
Johnson, Fred Funk, Justin Rose, Paula Creamer, Retief Goosen, Greg
Norman, Nick Faldo, Mike Weir, Andres Romero, Darren Clarke and
Natalie Gulbis, as well as Martin Kaymer, one of the European Tours
stars and the top-ranked golfer in Germany, who joined the
TaylorMade Tour Staff in 2009.Page 48 of 76
Marketing excellence as a key success factor
Well-coordinated and consumer-relevant marketing is paramount to
attaining sustainable market leadership. To achieve that,
TaylorMade-adidas Golf has combined product marketing, brand
communication and retail marketing into one fully integrated global
marketing team. This team uses a variety of strong marketing tools
to achieve its objectives. Product launches are supported by
substantial PR and marketing campaigns, involving key assets and
best-inclass customer support to drive new product sell-through. In
addition to traditional marketing techniques, TaylorMade-adidas
Golf is also dedicated to exploring and executing new and
innovative ways to promote products using social media (Facebook
and Twitter), online initiatives like www.Projectburner.com and
product seeding initiatives like last years free Burner 6-iron
giveaway and the Penta TP free-sleeve programme in 2010. Another
prime example of TaylorMade-adidas Golfs efforts to create unique
promotional events is the Wear in the World golf adventure, which
involves testing performance apparel in some of the worlds most
extreme weather conditions. Destinations included golf courses in
Death Valley, California, the high altitudes of Bolivia and
Argentina and Walker Bay in South Africa. The programme, which
illustrates how technologies such as CLIMACOOL, CLIMALITE and
CLIMAPROOF can help provide a competitive advantage in the most
extreme golf conditions, attracted widespread attention from
consumers and the media.
Intelligent retail marketing and distribution
TaylorMade-adidas Golf works with retail partners that possess
the skills to effectively showcase the performance advantages and
modern design credentials of TaylorMade, adidas Golf and Ashworth
products. Core channels include green grass retailers, off-course
golf specialty retailers and sporting goods retail formats with
golf-specific departments. Focusing on strategic accounts,
TaylorMade-adidas Golf strives to create and makePage 49 of 76
available state-of-the-art floor displays that show off products
and communicate key messages as clearly as possible, allowing it to
position its clubs, balls, footwear and apparel among the
top-selling golf products in these retail channels. Close working
relationships with key accounts will continue in 2010, as will
efforts to build additional brand presence at smaller retailers and
on-course golf shops. In emerging markets throughout the world, the
company employs established adidas Group infrastructures to
distribute products, promote awareness and drive growth.
Authenticity through Ashworth
The acquisition of Ashworth presents TaylorMade-adidas Golf with
a unique opportunity to establish a lifestyle business. Through the
combination of adidas Golf and Ashworth, the segment is now the
leading manufacturer in the golf apparel market. The acquisition
allows adidas Golf to sharpen its focus and leadership in
performance apparel, while under its new multi-brand approach
Ashworth can be refocused to golf lifestyle. Its roots in golf and
authenticity as a golf brand provide a key differentiator from
other golf lifestyle brands. From a product perspective, the brand
will primarily focus on extending its leadership in functional
cotton products that deliver a modern look and will prioritise the
mens segment. In line with TaylorMade -adidas Golfs strategy,
Ashworth will also seek to build Tour visibility and credibil ity
utilising partners such as Tour professional Fred Couples. While
maintaining two distinct brands, to maximise the commercial
opportunity of the acquisition, all operating and go-to-market
functions have been fully integrated to take advantage of
operational and fixed cost synergies.
Pricing strategy reflects brand positioningTaylorMade-adidas
Golfs pricing policy mirrors the positioning of its three brands.
TaylorMades pricing strategy is to dominate the market at premium
price points and compete aggressively in the high-volume mid-price
segment. adidas Golf supports its market reputation as the
innovation leader by sellingPage 50 of 76
its products primarily at premium price points. Ashworth
positions products in the mid- and premium-price categories. Market
share expansion, particularly in golf, is driven mainly by the
ability to deliver best-in-class lines of products at multiple
price points. In 2009, an example of TaylorMade-adidas Golfs
success in implementing this strategy is the TOUR360 Limited
(high-price) footwear and FitRx (medium-priced) footwear.
TaylorMade: extending leadership in metalwoods and irons
TaylorMade category priorities include strengthening its
position as the number one metalwood brand in the world, building
on its growing global market share in irons and increasing its
presence in wedges, putters and balls.
Metalwoods: Today, TaylorMade is the clear market leader in
metalwoods (drivers, fairway woods and hybrids). The brand is
particularly strong in the USA, where it has forged a 30% share of
the market and a large lead over its closest competitor. The brands
primary focus going forward is to remain the innovation leader and
expand its metalwood business outside the USA. This will in part be
driven by strengthening its promotion partnerships in other
regions. From a product perspective, the brand will build on the
success of the R9 franchise forged in 2009 with the launch of the
R9 SuperTri, the first club to unify all of TaylorMades major
driver technologies: Movable Weight Technology, Flight Control
Technology, Inverted Cone Technology and Ultra-Thin Wall
Technology, as well as the extension of the Burner family of
metalwoods with the introduction of the Burner SuperFast, which, at
284 grams, is the lightest driver TaylorMade has produced to date.
Together, the R9 SuperTri and the new Burner SuperFast driver will
be promoted with an extensive television, online and print campaign
called TaylorMade vs. TaylorMade.
Irons: In 2009, the new Burner irons have provided TaylorMade
with a strong foundation for future growth in the category. As
opposed to previous TaylorMade irons, the Burner long-irons,
middle-irons andPage 51 of 76
short-irons were developed separately rather than in conjunction
with each other. Their immediate popularity made Burner the first
TaylorMade iron model to reach number one in sales in the United
States, which in turn helped TaylorMade reach number one in iron
market share in the United States for the first time in the brands
history, a position it has now held since August 2009. In 2010,
TaylorMade will leverage this success with various product updates
and geographic expansion.
Wedges: Leveraging TaylorMades success in metalwoods and irons
to other categories such as wedges continues to be a strategic
priority. Innovation again is critical in this respect and, in
2009, TaylorMade debuted Exchangeable Face Technology (xFT) in the
category. xFT permits players to easily replace a worn clubface
with a new one, making it possible to maintain a fresh,
spin-inducing clubface without replacing the clubhead. For the
consumer, this is more cost-effective than buying a new wedge. In
light of the USGA and R&As recent ruling dictating that
iron-groove design must be less aggressive to promote less
backspin, xFT offers a distinct advantage which should allow
TaylorMade to grow its market share significantly in 2010.
Putters: TaylorMades Rossa Monza Spider high-MOI putters
continued to be in high demand by golfers everywhere, and were used
to win multiple tour events around the world. A 2009 addition to
the line, the Monza Spider Balero, is extremely popular in Asia and
helped make TaylorMade the number two putter brand in Japan. Plans
in 2010 call for a new addition to the Monza Spider line that
incorporates the input and suggestions of a variety of Tour
pros.
Golf balls: Success in this category depends on the ability to
create high-performance golf balls, bring them to market and build
credibility among Tour professionals. In 2009, TaylorMades status
as a maker of premium golf balls was enhanced when Tour
professional Yong-Eun Yang captured the PGA Championship using a TP
Red, the first time a major championship was won with a TaylorMade
ball. In 2010, TaylorMade will continue to build on its momentum in
golf balls, driven by the Penta TP ball. This is the first
five-layer golf ball, designed to promote optimum performance on
the five critical golf shots driver,Page 52 of 76
long-iron, middle-iron, short-iron and partial wedges.
TaylorMade intends to enhance marketplace acceptance and sales in
the golf ball category by extending TaylorMade branded offerings,
and increasing the number of Tour professionals using TaylorMade
balls.
Adidas Golf: setting new standards in highperformance footwear
and apparel
Adidas Golf makes high-performance golf footwear and apparel for
athletes who want to maximise their physical potential in order to
play the game at their highest level. Therefore, the brands array
of products embodies its popular maxim Equipment For Your Body. In
footwear, leveraging proprietary technologies from various other
adidas categories such as adiPRENE+ with golf-specific technologies
offers a significant competitive advantage over pure play golf
footwear brands. In 2009, adidas Golf was able to bring significant
new innovation to market including the ultra-stable TOUR360 4.0
with revolutionary THiNTech technology, and TOUR360 Sport with
50/50 protect, as well as the ultra-comfortable FitRx and FitRx
Sport. In apparel, adidas Golf positions itself as the most
innovative performance brand in the game by utilising adidas
technologies such as FORMOTION, CLIMACOOL and CLIMAPROOF
technologies in adidas Golf apparel products. adidas Golf was the
first major brand to incorporate technologies like these into golf
apparel. In 2010, a variety of exciting new launches such as a new
premium offering called adiPURE (footwear and apparel) will
continue adidas Golfs authentic union of design, technology and
function. In addition, the brand will begin to leverage its
partnership portfolio further. New signature lines planned with
Natalie Gulbis and Paula Creamer designed for and with input from
these two highly popular and visible LPGA stars will help adidas
Golf expand its line of women-specific golf products. Also planned
is the TOUR360 4.0 Sport, which offers a new approach to combining
breathability with protection, and a new range of CLIMACOOL tops
and bottoms with soft-touch COOLMAX fabric.
Page 53 of 76
Apparel Product of Taylor made
Men's
Ladies
Page 54 of 76
Ashworth
Ashworth, which was acquired in 2008, provides TaylorMade-adidas
Golf with a unique opportunity to establish a golf lifestyle
business. Founded in 1987, Ashworths roots in golf and authenticity
as a golf brand provide a key differentiator from other golf
lifestyle brands. In 2009, Ashworths efforts focused on creating a
platform for future profitable growth. Steps taken consist of a
branding facelift including modernising its iconic Golfman logo,
definition of product range architecture, cleaning up of
distribution and revamping its partnership portfolio. In addition,
all Ashworth operating and goto-market functions were fully
integrated with adidas Golf to take advantage of operational and
fixed-cost synergies. In 2010, the brand will be re-launched with a
focus on reconnecting with all golfers (professionals and
non-professionals alike) as the authentic golf brand, building on
its reputation for relaxed, lifestyle-orientated apparel that
appeals to golf enthusiasts of all ages, both on and off the
course. Products will incorporate proprietary EZ-Tech fabrics which
deliver easy care and superior wear, and performance fabrics for
warm-climate, on-course use. Like the other brands in the
TaylorMade-adidas Golf segment, Ashworth will seek to build Tour
visibility and credibility utilising partners such as Tour
professionals Fred Couples, Sean OHair, Ryan Palmer and Charles
Howell III.
Company History
Ashworth, Inc. is a leading producer of golf apparel and
sportswear. An innovative company, Ashworth revolutionized the golf
apparel industry in both fashion and function. The company changed
golf style from polyester and hard collars to cotton and twill.
Originally producing only men's fashions, Ashworth has grown to
design comfortable styles for women and young men. Its variety of
products is distributed worldwide at country clubs, pro shops, and
upscale department and specialty stores.
Page 55 of 76
Starting Out As Charter Golf, Inc.
Ashworth was created through the partnership of Gerald Montiel,
the entrepreneur, and John Ashworth, the golf fanatic. In 1984,
after selling a small chain of craft stores that he had started,
Montiel decided to open a chain of sporting goods stores. While at
a golf tournament in Albuquerque, New Mexico, he met Ashworth, who
was caddying for a friend on the pro tour. Just getting the
sporting goods chain off the ground, Montiel offered Ashworth a job
as a golf apparel and equipment buyer for his new stores. Within
two years, with Montiel's wife having divorced him and the two
partners now sharing a condo in Denver, the sporting goods chain
was liquidated and the two began planning their next business, a
chain of golf driving ranges. The idea to produce golf clothes came
up while they were driving down the California coast looking for
possible range locations. Ashworth thought that golf needed
something better than the current styles of polyester pants and
hard collars. The company was started even though neither one of
them knew anything about the clothing business. Montiel began
raising money to get the company on its feet, while Ashworth began
developing the designs. Working out of a dingy office in Los
Angeles's garment district and starting to lose money, Montiel
decided to take the company public. Despite not having generated
any revenue or product yet, Montiel was able to sell the idea to
Grady and Hatch, a New York-based underwriter. They had agreed to
sell 42 percent of Charter Golf for $1.2 million, but had to cancel
the deal because of the October 1987 stock market crash. Undaunted
by the setback, Montiel started to sell the shares himself. Selling
20 percent of Charter at 75 cents per share, he was able to raise
$685,000 by March 1988. With Montiel raising capital, Ashworth went
to work and convinced a local manufacturer to provide 200
all-cotton sample shirts, which Ashworth sold to golf shop buyers
he knew in southern California. By the end of its first year
Charter Golf had sold $374,000 worth of its Ashworth line of
shirts, pants, and shorts, but had lost $324,000. Knowing good
publicity was required for the company to be successful, the
partners needed to find a big name to promote the line. Ashworth
turned to a friend on the PGA Tour and consequently signed golfer
Fred Couples to an endorsement deal, paying him in Charter Golf
stock rather than cash.
Page 56 of 76
Charter Golf Begins to Grow
As the comfort and style of their clothing began to catch on,
Charter Golf's sales for fiscal 1989 were $2.14 million compared to
the previous year's $374,000. Needing more room for distribution,
Charter Golf relocated from its Oceanside facility to a new
14,000-square-foot headquarters in Carlsbad, California. With
another PGA Tour Player, John Cook, added to its list of endorsers,
the company continued to grow, increasing its market to 2,300 pro
shops and resorts. Charter Golf reached the NASDAQ board in 1990
under the symbol CGOL. The company marked its first profitable
quarter, reporting earnings of $32,000 on sales of $972,000. The
increased sales prompted Ashworth to be named the fastest-growing
line of golf shirts in America by Golf Pro Merchandiser magazine.
Also in 1990, Scott Verplank and Mark Wiebe joined Couples and Cook
as company endorsers. Expecting more growth in 1991, Charter Golf
moved into a new 35,000-square-foot facility in Carlsbad. Charter
Golf had created its success by following one simple motto: Keep it
simple, and two years ahead of everyone else. They managed to
appeal to the younger generation of golfers by making comfortable
golf clothes. By early 1991, accounts had to grown to 3,000, with
products sold in 41 percent of resorts around the country. That
total was dramatically up from 16 percent the year before. By late
1991, the company had grown to 3,500 accounts, with about 2,800 of
those being golf course pro shops. Now looking to foreign markets,
deals were signed to distribute Ashworth apparel in European and
Japanese markets. The company entered into a multi-year agreement
with Nissho Iwai, a major Japanese trading company, to market
products in Japan. They expected these new markets to represent
eight to ten percent of total sales volume by the next year.
Charter Golf's success was even shared by the professionals who
endorsed their product. Fred Couples had the PGA Tour's lowest
stroke average in 1991 and was named the PGA player of the year by
Golf World magazine. He had another great year in 1992, winning the
Masters and being named PGA player of the year for the second year
running. Dave Stockton, the captain of
Page 57 of 76
the U.S. Ryder Cup team, also began wearing Ashworth, becoming
the first player on the Senior Tour to wear the brand. In 1992, a
survey by Golf Pro Merchandiser again named Charter Golf's Ashworth
line as the fastest-growing line in the country and number one in
customer preference. Buoyed by its success, Charter Golf had
another public offering in February 1992, selling 1.5 million
shares at a price of $7.25 per share. With new capital and
increasing orders, the company opened a new 42,000-square-foot
distribution center next to its corporate headquarters. The new
facility had four times more storage space than the previous one
and could support sales volumes of $125 million. Frequently
customizing its Ashworth line to put the country club or course
logo on the apparel, Charter Golf was now selling to about 3,200 of
the nations 11,500 pro shops and resorts, with the average shop
bringing in $8,351 in merchandise in 1992. They continued to expand
in Europe and Japan as well, selling to more than 15 countries.
Foreign accounts made up seven percent of 1992 sales, while the new
women's line accounted for 12 percent of total sales.
Introducing New Product Lines
Now selling products all over the world, Charter announced in
1993 that it would introduce a new clothing line. The new line
differed from the Ashworth line in that it was to be sold in
department and specialty stores, rather than the traditional golf
pro shops. The new line, sold under the fictional name Harry Logan,
had its own designs and had a sales force separate from the
Ashworth line. The company hired CBS sports announcer Jim Nantz