As Adidas looks to capitalize on strong demand for its white-and-black Three-Stripe Samba and multi-colored Gazelle, it is also taking steps to prevent those shoes from becoming victims of their own success.
The German sportswear giant has ramped up production of the shoes, known as “terrace shoes” and inspired by football fans’ shoes from the 1970s and 1980s. Sales have increased from a few hundred thousand pairs per month early last year to millions of pairs per month, according to CEO Bjorn Gulden, and Adidas is now looking to further increase their popularity.
The company said sales of patio shoes contributed to its strong first-quarter performance, without giving detailed figures for the Samba, Gazelle and Spezial. The shoes start at $90, with limited-edition collaborations costing up to $350.
Investors and analysts are closely watching for signs of Adidas’ overreliance on shoes, with the abrupt shutdown of the highly profitable Yeezy business still fresh in the memory. Last year, Adidas posted losses for the first time in 30 years, after its split with American rapper and producer Kanye West ended the fashionable sneaker line.
The Adidas Samba has won Footwear News’ 2023 “Shoe of the Year” award, the brand’s first win since the Yeezy Boost 350 in 2015.
Aneesha Sherman, an analyst at Bernstein, estimates that patio shoes will generate 1.5 billion euros ($1.61 billion) in sales this year, about 7 percent of Adidas’ overall revenue and close to 1.7 billion euros that Yeezy brought in at its peak.
She predicts that patio shoe sales will likely peak in all regions this year.
“It’s obvious that this trend won’t last forever,” said Thomas Joekel, a portfolio manager at Union Investment, a Frankfurt-based asset management firm that owns Adidas shares.
“Ultimately, it’s the consumer who decides, and companies like Nike or Adidas need to be nimble to take advantage of these trends.
When British Prime Minister Rishi Sunak was seen wearing Sambas in a clip posted to Instagram earlier this month, some Brits felt he had dealt a blow to the shoe’s credibility. Sunak later jokingly apologized to “the Samba community”, but CEO Gulden said Sunak’s fondness for the shoe had not impacted sales.
LIMITED EDITIONS
Broader trend cycles can be deadly for big sportswear manufacturers. In 2018, Adidas’s sales in Europe, its largest market, plummeted when its minimalist white Stan Smith shoes began to go out of fashion. And Nike is currently reducing the supply of its classic Air Jordan 1 shoes due to lower demand.
Adidas is therefore trying to spread its bets. Its Campus shoes, thicker and skater-style, are growing in popularity and outselling the Samba in some markets, Mr. Gulden said. Adidas also plans to ramp up marketing of its classic Superstar shoe to reignite the trend next year.
She recently launched a $200 version of the shoe with designer Edison Chen, featuring a wavy sole. Mr Gulden said Adidas had worked to rid the market of seasonal colors of the Superstar, focusing only on the classic black and white, to ensure the market was “fresh” for the new launches that will take place later this year and next year.
“We will maintain the current franchises and then schedule the Superstar activation based on our needs and those of the retailers,” Gulden said. “We won’t mass-launch it globally. We’ll hold it back and let the consumer decide when he or she wants the Superstar.”
Releasing more expensive, limited-edition versions in collaboration with designers, like the $350 Gazelle Y-3 with Japanese fashion designer Yohji Yamamoto, is one way to keep a product trendy.
“What Adidas and Nike are doing with some of their products is trying to follow the rules of luxury – premiumization, exclusivity, restriction of supply, making everything more desirable in order to get higher margins and creating a halo effect for the brand,” said Matt Clark, a retail expert at consultancy AlixPartners in London.
For retailer JD Sports, new variations of the Samba shoe in different colors and materials help keep shoppers engaged, CEO Regis Schultz said in his recent results. Retailer Foot Locker also reported “strong demand” for Adidas patio models.
“Gulden is very aware that you shouldn’t overdo what you’re doing to keep the model – to keep the brand and model hot,” said Cédric Lecasble, an analyst at Stifel.
“If they distributed tens of millions of Samba in the same year, they would probably sell them, but they would also probably end the Samba dynamic,” he added.
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