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Takeaway: Adidas is failing to drive the culture of the company.

AdiBok, NKE, UA - Adidas fights to draw top talent to headquarters in sleepy Bavarian town

  • "Adidas needs world-class designers, brand experts and technical whizz kids to improve its image against U.S. rival Nike, but persuading them to move to its headquarters in rural Germany is difficult. Adidas acknowledges it is hard to recruit at its headquarters near the Bavarian town of Herzogenaurach, particularly for design, marketing and digital roles, and admits it missed trends in the U.S. market, where Under Armour has just overtaken it as No. 2 behind Nike. Nike's better than expected earnings on Sept. 25 underscored its ascendancy."
  • Read more at Reuters (http://uk.reuters.com/article/2014/09/29/uk-adidas-germany-insight-idUKKCN0HN0B720140929).

 10-Second Takeaway: Adidas is in Denial About Why It's Losing Share - adidas

10 SECOND HEDGEYE RETAIL TAKEAWAY

Let's be clear about something, Adidas is not losing share because its headquarters is in a sleepy town. If anything we'd argue that its town is sleepy because the company is failing to drive the culture of the company. Nike is crushing it, and it's based in Beaverton, OR -- not exactly a cultural mecca. Yes, it's 20 min from Portland and a short drive to Seattle. But Adidas is a short drive from several major towns (as Adi CEO points out in this article), and it also has an office in Portland with 1,000 employees -- a good deal of them poached from Nike.  

Bottom Line: Adidas' problem goes far beyond where people hang their hat.  First it should look really close at its processes and ideals. Then it can worry about where the people that execute on them are physically located.

10-Second Takeaway: Adidas is in Denial About Why It's Losing Share - rita ora