Adidas (OTC: ADDDF), the German sportswear maker, has had an uneasy 2023 - dropping the top-selling Yeezy brand following anti-semitic remarks by its curator Kanye West, which cost the company around $1.3 billion in sales.
But it's on the turnaround. Third-quarter results on Friday were better than expected and CEO Bjorn Gulden made all the right sounds of a company focusing back on sport rather than celebrity.
And, despite the contrition and the "our current performance is not good enough" rhetoric, the shares are on a roll, up 50% this year. Great for any shareholders getting in at the beginning of the year. The shares are, however, down 74% from their July 2022 peak.
This is a similar story to that of the world's biggest sportswear maker Nike (NYSE: NKE). Riding high at a record $179 in November 2021, its shares currently trade 36% lower at $114.83.
Olympics and Euro 2024 Showcases
The total annual global value of the sports apparel market is around $200 billion according to market research company Statista.
And 2024 could be a record-breaking year for the sector with two major international events over the summer.
Kicking off on June 14, the Euro 2024 football championship plays out over four weeks snd beginning on July 26, the Paris Olympics runs through to Aug. 11.
The Olympic Games is particularly important. A global event that attracts millions of viewers worldwide, it's the perfect opportunity for sports apparel companies to showcase their products - often tying in with sporting stars as their sponsors.
Among the new sports being introduced at the Paris Games next year is breaking (dance) - with its roots in hip-hop dancing and urban streetwear - which plays into the hand of brands such as Nike, Adidas and Under Armour Inc (NYSE: UA) and retailers such as Dick's Sporting Goods Inc (NYSE: DKS), Columbia Sportswear Company (NYSE: COLM) and Academy Sports and Outdoors Inc (NYSE: ASO).
Nike is already the official sponsor of the U.S., Japanese and South Korean breaking federations, and Adidas revealed in June that it had signed up "B-Girl 671" - the world number-one female breaker, China's Liu Qingyi.
Sales Boost Effect
Not only do these sporting events drive up the visibility of sportswear brands, but they also help drive up sales. During the 2021 Tokyo Games, Amazon reported massive rises in certain search terms: "Team USA Olympic apparel" and USA Olympic apparel" among them.
While the Euro 2024 Championship is unlikely to make any waves in the U.S., it's a massive deal across Europe and, to a significant extent Africa, Asia-Pacific and South America - where football (soccer) is the predominant team sport.
During the last World Cup in 2022, retailers reported a strong climb in sales of football shirts and sporting equipment.
Thus, 2024 - with the double sporting fixture - could be a strong year for sales for makers and retailers of sporting apparel, providing the economic climate lends some support.