Adidas bets on Beckham to score market share - MARINA STRAUSS

When David Beckham stepped onto the soccer field for the Los Angeles Galaxy Saturday night, it wasn't just the Major League Soccer team that was counting on him to lift its fortunes.

Adidas AG, the German sporting goods maker that was once an industry leader with its well-engineered shoes, also was betting that the 32-year-old British superstar would help boost its business in the North American sports world.

Adidas' sponsorship of the fashionable midfielder is one in a series of high-profile marketing initiatives that industry observers say are already paying off for the company on this side of the Atlantic. Earlier this month, it signed up NASCAR driver Dale Earnhardt Jr. to its first major stock car racing sponsorship contract. More recently, it stole away a prized University of Michigan deal - to outfit all 25 collegiate teams - from industry leader Nike Inc. It snatched yet another agreement - with Texas A&M University - from Nike at last week .

"They're taking their business model and starting to translate that to what is relevant to North American consumers," said Keith McIntyre, president of K. Mac & Associates Marketing Inc. "They're taking a very pro-active approach."
The process got into full gear early last year when adidas, a dominant player in Europe, scooped up U.S.-based Reebok International Ltd. in a move that doubled its market share in North America and narrowed the gap with Beaverton, Ore.-based Nike.

Two years ago, North American business accounted for about 23 per cent of adidas' total sales - €1.56-billion ($2.26-billion) - while European sales were almost half the total. After the acquisition last year, North American business - at €3.3-billion - represented about 33 per cent of overall sales, while the European slice of the business had fallen to about 42 per cent. (Adidas also operates in Asia and, to a much lesser extent, in South America.)

Within months of the Reebok acquisition, adidas signalled its new focus by signing a deal to use the adidas brand instead of the Reebok brand as exclusive uniform and apparel provider for the National Basketball Association. Adidas was intent on tying its name not only to a global sports property but to one particularly close to the hearts of Americans, said Steve Ralph, vice-president of sales and marketing at adidas Canada.

"All these are North American sports," Mr. Ralph said. "What you're seeing is a considerable investment in the North American market."

In the 1970s, adidas was a coveted brand in North America, sought out for its sleek track suits and sneakers. But its signature triple stripes were quickly overtaken by Nike's iconic swoosh logo and daunting marketing machine.

Mr. Ralph said the North American marketplace is important because it is characterized by a "sports crazy" attitude toward basketball, football and baseball. In Europe, on the other hand, the market is more balanced between two main interests: soccer and fashion.

Adidas has distinguished itself from Nike by chasing after entire league sponsorships - backing the NBA and MLS - rather than just teams or individual athletes, he said.

Mr. McIntyre said that adidas' initiatives are already paying off. His own 12-year-old son, a big golf player, used to insist on wearing only Nike gear. But just a week ago, the boy coveted a pair of adidas' three-striped golf shoes.

"He said, 'They're very comfortable and, more important, they're cool,'" Mr. McIntyre recalled his son saying.

Adidas started targeting the North American market in the late 1990s, when it signed a sponsorship deal with the New York Yankees, the biggest property in baseball. But it's been just in the past few years that adidas has made more of a comeback, Mr. McIntyre said.

Now the Beckham tie-in could help broaden its appeal in North America. "They've been able to tap into teams and athletes that people want to be part of."