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Why Adidas Is Suddenly Killing It

On a late summer afternoon in Adidas Village, a complex of five Rubik’s cube–like buildings with colorful, tile façades on the east side of Portland, Oregon, a brood of young footwear designers gathered in a second-floor common area for the final presentation of an outgoing summer intern. The space was softly lit and industrial, with pendulous silver light fixtures hanging from the ceiling amid exposed metal piping. The designers — casually fit, tattooed, and dressed in solid tones that balanced conventionally conspicuous footwear — spread themselves across an array of sectionals and bright, fabric lounge chairs.

The intern, a young woman named Laurance, wore a coral blouse and long, dark brown braids that hung to her chest. She took her place facing the audience, standing in front of an oversized poster board plastered with sketches of a shoe of her own design. The sketches portrayed three months of labored iteration, each sheet of paper representing a fresh go at the canvas. A high-top in one sketch became a low-top in the next; straps appeared and then went away. The final result — a spaceship-sleek, laceless running shoe that swooped dramatically from ankle to toe — studiously resembled the kind of sneakers that Adidas has produced with growing frequency over the past two years: radically exuberant, with a striking silhouette that pointedly diverged from the dowdy, functional designs for which the 67-year-old company had long been known.

“I’m super nervous,” Laurance said with a sheepish smile, spurring a wave of sympathetic laughter. She hunched slightly and clasped her hands at her waist. “I hope I get through all the information correctly.”

Like most of the world’s great sneaker brands, Adidas makes the bulk of its revenue ($19 billion in 2015) by selling shoes that were first introduced long before Laurance was born. The company is synonymous with a stable of baby boomer sensations including the Samba (1950), the Superstar (1969), and the Stan Smith (1973) that — thanks to splashy endorsements, persistent marketing, and humankind’s collective failure to commit to a sixth toe — have never gone out of style. Each of those shoes, though slacker staples today, was originally tailored for specialized athletic performance (soccer, basketball, and tennis, respectively), but in an era when sneakers have crept into every arena of waking life — including formerly forbidden zones like the office and the chapel — envisioning who will wear new sports shoes and why has never been more subjective.

Classic, Nerdy, Cool: The Evolution of Adidas Design

Classic, Nerdy, Cool: The Evolution of Adidas Design


Laurance began her presentation safely enough, discussing “the future of sport and what athletic performance can elevate to.” She outlined a sci-fi vision that was part Back to the Future, part The Six Million Dollar Man, part Fitbit, describing how her shoe would use biometrics and give intelligent feedback using haptic vibrations and electroluminescent wiring. But she seemed self-conscious about placing too much emphasis on technological enhancements, taking care to describe the product as “fashionable” and “stylish” whenever possible. Five years ago, the designer of a shoe this advanced would have inevitably focused on the competitive advantage conferred to serious athletes. But Laurance had a completely different species of customer in mind. In a painstakingly scripted backstory, she described him as a 20-year-old photography student and jogger at Brooklyn’s Pratt University.

In the audience, a design director wearing a baseball cap and Warby Parkers nodded approvingly. When Laurance was finished, she got glowing remarks from the room. “You dreamed big, but it still felt tangible and connected,” someone said. Everyone in the crowd clapped and cheered.

Adidas, an early pioneer in sportswear founded in 1949 by the German soccer cleats and track spikes visionary Adi Dassler, has recently remodeled itself in the face of profound changes in the industry. For decades, its familiar three stripes and trefoil logos have been a constant presence in public life — in sports stadiums, on the street, and in the classroom — all over the world. The company employs over 55,000 workers in 160 countries, who produce and market more than 300 million new pairs of sneakers each year. But after years of failing to replicate the success of early hits like the Superstar, even as demand for athletic gear exploded, younger and more nimble adversaries have threatened its perch. In 2014, an insurgent Under Armour passed Adidas to become the second largest sportswear manufacturer in the US after Nike, aided by a 30% and 20% decline at Adidas in footwear and apparel sales, respectively.

That same year, the German brand took bold steps to overhaul its reputation, particularly in America, where consumers have a disproportionate influence on the global sportswear industry. It relocated its product design headquarters from Herzogenaurach, Germany, to Portland, and appointed its first global creative director in 15 years to oversee it. The creative director, an American named Paul Gaudio, cut more than 30% of Adidas’s product line in the US, and outlined a new mission for the entire company to serve more customers like Laurance’s hypothetical Pratt student — trend-savvy, with a diverse range of interests — rather than the style-agnostic sports enthusiasts it had relied on in the past.

The results of the shift have been remarkably unambiguous. For three consecutive quarters this year, Adidas’s sales in North America have jumped by 20% or more compared with the same period last year, helping it to overtake Under Armour and reclaim its No. 2 position in the US after more than a year in third, according to an analysis by SportsOneSource. The company increased its share of the $36.5 billion US footwear market by 2.5% in the first nine months of 2016, according to the NPD Group. And on the German DAX index, which lists 30 blue-chip stocks, it’s the best performing stock of the year — a 180-degree reversal from 2014, when it had been the worst performing. “The great momentum across all major markets shows the strength of our strategy,” said Kasper Rorsted — who replaced longtime Adidas chief executive Herbert Hainer in October — on an earnings call earlier this month.

Off the balance sheet, evidence of Adidas’s cultural ascendancy is hard to miss. Its classic styles have never been more popular, uniting a pan-generational coalition of self-conscious teenagers, broke twentysomethings, and creative-leaning professionals. Its logo has become ubiquitous on fashion blogs and on runways during fashion week, thanks to oxygen-stealing collaborations with provocateurs like Kanye West, Pharrell, and Raf Simons, among others worth their weight in eBay markups. In 2015, Complex named it the best men’s style brand of the year, above Gucci and Rick Owens, himself an Adidas collaborator.

But the most important drivers of Adidas’s turnaround, and its best hope for sustainable growth, are the new sneakers it has designed in-house under Gaudio. Lines bearing his influence — including Ultra Boost, NMD, Tubular, and AlphaBounce — have fueled an across-the-board fervor for Adidas shoes not seen in the US since the late 1980s. One model, the Ultra Boost Uncaged, became the company’s fastest-selling American performance shoe of all time in June, selling 11,000 pairs within an hour of its release. Two years after pulling itself back from the brink of irrelevance, Adidas looks, acts, and earns like a different company. And after decades in Nike’s shadow, it’s evolved into the savviest sponsor of the fabulous future of gym clothes, thanks to a product roadmap that leans into sportswear’s burgeoning role as the default uniform for life.

“They’re the brand of the year,” says Matt Powell, a sportswear analyst for the NPD group and longtime Adidas watcher. “After years of struggling here, they finally have their focus in the right place.”

Inside the Adidas complex in Portland, Ore.

Bryan Aulick for BuzzFeed News

As creative director, Gaudio is in charge of 650 designers that dream up everything Adidas makes — from shoes to clothing to posts on Instagram. He brings with him over 20 years of experience at the company — most of his adult life — and has approached the task of renovating its identity with a familial sense of devotion. He began at Adidas making far-out footwear prototypes as an advanced concepts designer in 1991 and has worked for the brand on and off ever since. During his longest period away, between 2000 and 2007, he helped redesign and resurrect the flagship vehicle of Norton Motorcycles — a British legacy brand — as a passion project.


Bryan Aulick for BuzzFeed News

His office in Adidas Village is Spartan, naturally lit, and modestly decorated — some sports posters, pennants, and mood boards — with the exception of a four-foot decal that says “Paul’s Boutique” in graffiti script on a large, interior-facing window. A bronze figurine of Adi Dassler, samples of Adidas’s patented “boost” midsoles, and other proprietary ephemera are scattered across two tables.

Before Gaudio’s appointment, more than a decade without unified creative leadership had left Adidas with as many identities as it had product categories. Plenty of people loved their Adidas soccer cleats, or basketball shorts, or Superstars, but not enough had strong feelings about the brand itself. As the head of design for all of Adidas, Gaudio is conductor-in-chief, directing scores of creative specialists — his players — toward a harmonious vision for how the brand’s products should look, feel, and function. His first order of business was overhauling the company’s organizational structure, installing dedicated design teams at each of Adidas’s core businesses (including running, soccer, basketball, football, and training) that report directly to him.

“It’s a collective consciousness rather than a set of directions,” he told me of this approach. “The brand is a narrative — it’s an idea that people both inside and outside the company have to buy into. My role is to shape the narrative: ‘What do we stand for? Why are we here? How do we think and feel and act?’”

Gaudio is average build in a fitted black T-shirt and jeans, with a square chin, snowy stubble, and a calm, unassuming manner that subverts the cartoon of the tempestuous creative visionary. Employees I talked to described him as “extremely even-keeled” and “a stabilizing presence.” Born and raised in blue-collar Pittsburgh, he speaks with a tempered Western Pennsylvanian accent (“They’re lookin’ fer something really comfortable”; “They run to get in shee-yape”) and uses the expression “holy cow” with aplomb. He worked in the parts department at the local Porsche/Audi dealership in high school and still renovates vintage cars and bikes in his spare time. Now 50, you can see vestiges of a life in and around garages in his knuckle tattoos (his wife’s initials), and in the slick waves of silver hair that he combs back and straight — part off-duty Jon Stewart, part Sons of Anarchy.

He trained to become an industrial designer and never anticipated a career in footwear or fashion. When he was around 8 years old, Gaudio would spend hours at a furniture upholstery store owned by his grandfather, captivated by the strange machinery, lumber, and fabrics that flowed from every corner. Building things, he found, was more fun than drawing them, and with his grandfather’s blessing he would take planks of wood to make an airplane or a boat, using vinyl left over from chair backings for the sail. In high school, Gaudio took up football, hoping he might get an athletic scholarship to college. The scholarship never came, but he never gave up sketching and building. He made go-karts, skateboards, and tree houses, and took up customizing the things he didn’t make himself, such as plain white sneakers that he painted with his own designs.

On an informational visit to the University of Cincinnati in the early ‘80s, Gaudio was thrilled to stumble upon an industrial-design studio on campus, where he found himself surrounded by kindred spirits. He eventually attended design school at Carnegie Mellon in Pittsburgh, and later worked at the consulting firm SG Hauser, helping to develop consumer electronics, medical products, and lab equipment. When a friend who had gone to work for Adidas in Germany reached out to him about a job opportunity in 1991, he was skeptical — the brand was then also in the middle of a downturn. But Gaudio was convinced by Peter Moore, Adidas’s creative director at the time and the last before him, who had created the first Air Jordan for Nike and was looking for industrial designers that could help elevate performance footwear.

Adi Dassler in his office, 1954.

Ullstein Bild / Getty Images

Since the days of Adi Dassler, whose revolutionary adjustable soccer cleats are credited with tipping the scales for Germany at the mud-drenched 1954 World Cup, Adidas has often operated more like a tech company than a fashion one. Throughout the mid-20th century, its reputation for outfitting athletes like Jesse Owens and Cassius Clay with the best available gear was unmatched, helping to propel the brand past Puma, its biggest competitor at the time, famously founded by Dassler’s brother and bitter rival, Rudolf. By 1964, Adidas was the world’s biggest name in sports, with 80% of competitors at that year’s Olympics wearing shoes with its famous three-stripes logo.

But trouble in America began in the ‘70s, when Portland-based Nike rose to prominence on the back of a national craze over recreational jogging. Nike’s first commercially available sneaker, the Cortez, released in 1972, was embraced by joggers as both a running shoe and a status symbol, stylish enough to flaunt with a pair of jeans. Nike would successfully repeat that formula again and again, churning out one model after another — Air Max, Air Force 1, Air Jordan — that could double as both performance shoe and fashion statement. But Adidas failed to adapt to the idiosyncrasies of fashion, and had an internal culture that treated aesthetics as secondary to utility.

Some models, most notably the Superstar — immortalized in 1986 by Run DMC — and the Stan Smith, favored by Celine’s Phoebe Philo, became icons of style in their own right. But the brand was never able to compete with the lust and envy inspired by Nike products, which came to be synonymous with American athletic life. Today, Nike dwarfs its closest competitor in US athletic footwear sales 60% to 7%, according to Powell. And just as Adidas lost America, it eventually lost the world.

Liz Callow, Adidas director of color and trend, at the Adidas office.

Bryan Aulick for BuzzFeed News

Gaudio’s plan to resuscitate Adidas design was born from a reckoning with the company’s past mistakes. Over the past two years, he’s brought parity to aesthetics and performance at long last, and updated the aims of both to target a new generation of consumers. Adidas now refers to itself as “The Creator Brand,” a nom de guerre that derives from a strategic recasting of athletic pursuit as a form of creative expression. The Creator Brand posits that every athlete is a kind of creative professional — a basketball player on a fast break doesn’t simply dunk the ball, he “creates in the air” — and should likewise be afforded the indulgences of personal style. It elides the traditional boundaries between sporty and artsy, jocks and hipsters, zooming out to include both in a single frame.

Adidas isn’t an originator of these ideas — they map our current moment, when sports heroes like Cam Newton and Russell Westbrook are almost as well known for what they wear to the stadium as how they play when they get there — but it wants to embody them. Gaudio drew inspiration from the cohort that idolizes Newton and Westbrook, but also from his own background in Pittsburgh, as a self-styled high school football player who spent as much time in his sketchbook as he did on the field.

“Consumers have gotten more sophisticated,” Gaudio told me. “High school athletes that we talk to, they curate their own lives with bits and pieces from everywhere. Whether it’s making the team, or the clothes they wear, or the music they listen to, or the people they hang out with, for them it’s all connected.”

Bryan Aulick for BuzzFeed News

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