Dive Brief:
- In the midst of a search for a new CEO, Adidas on Friday confirmed it was in talks with Puma CEO Bjørn Gulden to take over the top spot from Kasper Rorsted. Gulden has more than 20 years of experience in the sporting goods and footwear industry, and has been CEO of Puma since 2013.
- In August, Adidas announced Rorsted would be stepping down sometime in 2023. He has been CEO since 2016.
- Puma on Friday made its own succession plans: The company said Arne Freundt, a 10-year Puma veteran and its current chief commercial officer, would be taking over the CEO post from Gulden in January.
Dive Insight:
Adidas may be getting its next CEO from a brand close to home.
Established by the brother of Adidas founder Adi Dassler, Puma is headquartered in the same region of Germany and the two have been rivals for decades. Puma is a much smaller company than Adidas, bringing in 6.8 billion euros in net sales in 2021 (about the same in U.S. dollars at current conversion rates), compared to 21.2 billion euros at its competitor. But Adidas could use some new blood, Wedbush analysts said this summer.
“[Adidas] has lagged rival [Nike]’s growth since late-2018 (including a deeper pandemic ‘trough’ and a slower recovery),” Tom Nikic and Ezra Weener said in emailed comments about Rorsted’s departure. “While he has had some notable wins during his tenure (strong digital growth, the well-executed sale of Reebok), there's also been a notable lack of product-related ‘wins’, particularly in light of the situation he inherited (when the business was driven by a well-rounded combination of classic styles like the Superstar/Stan Smith, innovative new models like Ultra Boost/NMD, and the emergence of the Yeezy collaborative sub-brand).”
The last of those is now officially over, after Adidas dropped the sub-brand and terminated its partnership with Kanye West, also known as Ye, in October. That decision will cost Adidas about $250 million in net income this year and it will lose a chunk of its net revenue going forward, but it leaves room for Adidas’ next CEO to form additional partnerships and start a new chapter for the company. Gulden already has experience working with top-notch celebrities: Wedbush’s Nikic noted on Friday that Puma has partnerships with the likes of Rihanna, Kylie Jenner, Jay-Z and Selena Gomez, and the brand has performed “exceedingly well” under Gulden’s watch.
"We think this is one of the best hires they could make, assuming it's true, given Mr. Gulden's successful tenure at Adidas's crosstown rival,” Nikic said in emailed comments. “We'd also note that unlike Mr. Rorsted, who came to Adidas with no direct athletic industry experience, Mr. Gulden spent nearly 10 years heading up one of the world's largest athleticwear brands ... and this is actually his 2nd stop at Adidas (he was the SVP of apparel/accessories earlier in the career).”
Aside from its Yeezy troubles, Adidas has struggled to recover in Greater China due to COVID lockdowns, which has created knock-on effects across the company. Adidas in July slashed its guidance for the year, forecasting revenue growth in the mid- to high-single-digit range, down from initial projections for double-digit growth. The retailer reduced its guidance again, as a result of “further deterioration of traffic trends in Greater China,” in October.
