Analysts Say Adidas Will Suffer During NBA Lockout
October 14, 2011
Analysts believe Adidas faces losing half its licensed NBA apparel sales as a result of the NBA lockout.
High profile games have been dropped from the 2011/12 season, due to start on Nov. 1, including defending champions Chicago Bulls’s trip to face the Dallas Mavericks.
NBA players and owners said on Wednesday they would enlist a mediator in the dispute over collective bargaining.
Basketball is a lucrative business in the United States for the world’s top two sporting goods makers, Nike and Adidas.
Adidas is likely to suffer most of all from the lockout because it has been the license holder to provide NBA uniforms and apparel for five years.
Adidas make $100 million in sales from licensed NBA products. Basketball products are one of its top five most lucrative sporting categories.
Matt Powell, analyst at SportsOneSource, said licensed apparel sales could decrease by 50% if the season were cancelled. This would mirror the impact of the 1998/9 season lockout.
Powell said: “Overall, sales of NBA licensed products fell by 20 percent last week, and I view that as the beginning of the fall because of the lockout.”
It is important for businesses that season begins before Christmas because it’s the busiest time sales and demand for NBA products traditionally drops further into the season.
Euromonitor analyst Kailing Cai said: “In terms of licensed apparel, fans tend to buy jerseys near the beginning of the season.”
Adidas claims it’s more interested in footwear sales, which account for a vast proportion of the basketball market.
Chief Executive Herbert Hainer said:”The kids are still buying the shoes,”
Analysts believe sales of basketball shoes will be aided by ubiquitous advertising, especially on social media websites, and companies’ attempts to promote their products at local levels, including through college basketball.