No matter which way you slice it, it’s been a pretty challenging past several years for the retail industry.
Even some of the biggest corporate incumbents have had to grapple with rapid changes and consolidation since the early 2020s.
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COVID-19, which occurred at the beginning of the decade, brought widespread lockdowns and reduced capacity for in-person shopping, dining, and travel.
And unless retailers were flush with cash going into the pandemic — or had robust online operations to float them before business opened again — the game of survival was suddenly much harder.
When things ultimately reopened, interest rates were no longer favorable for many places to take on debt. As a result, retailers had to shrink their footprints to shore up profits or close entirely.
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Athletic apparel saw growth during the 2020s
But there was one exception to the rule.
Largely speaking, the athletic apparel or ath-leisure industry, which includes several large players like Lululemon, Nike, Adidas, and many smaller brands, saw impressive growth during the pandemic.
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That’s because many folks were working from home and had more free time on their hands to practice hobbies — like playing basketball at a nearby court or doing yoga at home — or they simply got a lot more active.
Adidas makes a big change
But while a large brand like Adidas might have seen growth during the pandemic, the German sportswear company struggled in a different department.
It decided to terminate its once popular partnership — called Yeezy — with rapper Kanye West after West made a string of despairing and controversial comments in 2022.
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Now, three years on, Adidas says it has successfully removed and liquidated all Yeezy inventory.
Adidas CFO Harm Ohlmeyer told analysts that there is “not one Yeezy shoe left in our inventory.”
Further, Adidas CEO Bjorn Gulden said the brand sees potential upside while other brands meet their struggles now.
“You’re all aware that the big competitor is struggling,” Gulden said, alluding to Nike on the call. “And you’re also aware that the world is very volatile — and a volatile world where the biggest one is struggling is of course an advantage for someone who wants to change their model.”
Adidas sees opportunity to grow, even in the U.S., where competition is red hot.
“We don’t need to be No. 1 in America because that’s an illusion — the competitors are so much stronger — but we can definitely grow and become much, much stronger in the U.S. than we have historically been,” Gulden said.
Full-year revenue increased 11% to 23.7 billion euros, and Q4 revenue was up 24%.
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