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Features: From jerseys to shoes -- Investment adjustment would be Adidas' redemption?

Xinhua, March 19, 2015 Adjust font size:

The decision of Adidas not renewing its NBA outfit contract could be a risky move for the sportswear giant and reshape the U.S. retail sportswear market.

With months of declining U.S. market share, Adidas fell to the No. 3 spot in U.S. athletic apparel sales. On Monday, Adidas announced not to pursue an extension to its apparel deal with the National Basketball Association (NBA), which expires at the end of the 2016-17 season.

Changing the investment strategy to players shoes means Adidas has strategically determined that it was better off investing in players than digging into selling jerseys. After losing ground to Nike and was surpassed by Under Armour, the decision is kind of bitter.

Adidas expect to double the number of basketball players who wear its shoes on court from 70 players to 140 players in the next five years, while also focus on youth basketball.

"We feel with a different investment strategy, we will be more successful," an Adidas spokeswoman said. "We want to put a bigger focus on players in our shoes."

But the needle-to-head battle against Nike on player sponsorships is domed to be a tough road for Adidas.

According to SportScanInfo, Nike and its Jordan Brand subsidiary commanded 95.5% of the $4.2 billion basketball shoe market last year. Adidas only accounted for 2.6%.

LeBron James and Kevin Durant, the two highest sneaker sellers in the league, are both Nike guys. Anthony Davis, Kobe Bryant, Chris Paul, Russell Westbrook, James Harden, and Carmelo Anthony are also either Nike or Air Jordan players.

Adidas has a long list of notable former NBA players, like Kareem Abdul-Jabbar, Elgin Baylor, Kobe Bryant, Dikembe Mutombo, Patrick Ewing and etc., but with Derrick Rose and Dwight Howard struggling with injuries, John Wall might be the only flag-carrier for the brand.

With the success in the NBA, Nike quickly explores the fields as it has extended its on-field apparel deal with the NFL, which expire after the 2016 season, for three more years till 2019, according to the Sports Business Journal.

But for Adidas, it is going to be story of redemption for the next three years.

Adidas has provided apparel for the NBA since 2006 and its 10- year deal worth an estimated $400 million, expires at the end of the 2016-2017 season. With Adidas out, Nike and Under Armour are expected to battle it out for the contract. Endite