Rebooting Adidas

The shoemaker is looking for a new CEO who can steer both the brand and the bottom line

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Seven years ago, Adidas AG was gaining momentum with hot-selling shoes co-designed by influencers such as Pharrell Williams and Kanye West. But some investors thought managers were spending too much in their quest for cool and started calling for new leadership. They found their man in Kasper Rorsted, a famously frugal Dane whom Adidas hired as its chief executive officer after he produced record earnings at soap and detergent maker Henkel AG.

Rorsted quickly sold off the hockey and golf units and doubled down on e-commerce, fueling profits and prompting Germany’s Manager magazine to name him the country’s CEO of the year in 2019. But since Adidas’s shares peaked last year, various blows, blunders, and plain bad luck have conspired to erase most of Rorsted’s progress. With its profit margins and stock price falling below their 2016 levels, the company says Rorsted will step down next year to “pave the way for a restart.”

The new leader will need to breathe fresh life into the brand, creating another era of hot sneakers and apparel but keeping a close eye on finances. While the world continues to embrace casual fashion and fitness—trends that gained strength in the Covid-19 era—sports companies have struggled. Nike’s shares are down about 40% in the past year, Puma is off by about half, and even Wall Street darling Lululemon Athletica has fallen almost a quarter.