As we have already reported, Adidas wants to focus on fewer sports categories as part of its new “Own the Game” business plan through 2025. The outdoor sector is one of them, along with football, running and training.. Adidas’ CEO, Kaspar Rorsted, told the Financial Times a few days ago that the company is ditching niche categories like lacrosse or Australian Rules Football, while reducing its footprint in wrestling and cricket, where it is looking for licensing partners.

Rorsted told the FT that Adidas is currently only “number six or seven” in the growing outdoor sector, way behind market leaders like The North Face (whose sales are approaching $2 billion). With its Adidas Terrex brand, outdoor only contributes a “single-digit” percentage to the group’s annual turnover of nearly €20 billion, he indicated. We estimated in The Outdoor Industry Compass in 2019 that its sales of outdoor shoes alone had grown to more than €400 million a year under the management of Tim Janaway, formerly in charge of outdoor and other segments at Adidas.

Carla Murphy, a former executive of Icebreaker who was placed in charge of Adidas’ outdoor segment on Dec. 14, is expected to expand the group’s presence in outdoor by developing a “full technical apparel range, Rorsted said. Also, additional outdoor stores will be opened in “key outdoor destinations around the globe” under the Terrex brand.

Rorsted said he was confident that Adidas would be able to reach its goals in the sector in the next five to ten years because it has built up “an enormous amount of credibility” with its Terrex brand, whose sales continued to grow in 2020, while the group as a whole saw its sales decline by 16 percent.

He acknowledged that there has been a perception in the past that multinationals like Adidas were at a disadvantage in this market to small and nimble outdoor brands that stressed authenticity and individualism, but the progress of Terrex seems to indicate that the market is changing.

In our opinion, it was probably this kind of perception that turned Nike’s experiment in outdoor with its Nike ACG line into a near-failure. We believe that the Adidas group’s more focused approach and its emphasis on sustainability are going to be a plus in this market.