Adidas Bets on Big Cities to Boost Earnings Growth

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HERZOGENAURACH, Germany—Adidas AG is betting on ramping up its presence in New York, Los Angeles and another four of the world’s most fashionable cities to kick-start earnings growth in the next five years and recoup ground lost to rival Nike Inc. Facing criticism from investors for its recent subpar performance, the world’s No. 2 sporting-goods company behind Nike, said on Thursday that it aims to lift net profit by 15% a year through 2020. The promise follows two recent profit warnings as sales fell short of management expectations. Central to Adidas’s growth strategy is a decision to “over-proportionally” invest in talent and marketing in metropolitan areas around the world, focusing on Los Angeles, New York, London, Paris, Shanghai and Tokyo. “If we win running in New York and Los Angeles, we will win running in the U.S.,” Roland Auschel, head of global sales at Adidas, said at a presentation of the new planon Thursday. Adidas has also vowed to speed up how quickly it brings new products to market and invest more in its core brands, particularly in the U.S. The company wants to open 55 new stores in the U.S. in the next 2½ years. It has 30 today