Adidas

• 1. Introduction

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  Adidas began not in a boardroom or a factory, but in a scullery in Herzogenaurach, Germany, where a young man named Adolf Dassler handcrafted sports shoes after returning from World War I. That domestic origin, humble almost to the point of absurdity, would grow into the second-largest sportswear manufacturer on earth. By 2024, Adidas was reporting revenue of €23 billion. The company holds an 8.33% stake in Bayern Munich and owns the fitness technology company Runtastic. Its three stripes are among the most recognisable marks in global commerce. But how did a cobbler's shed in a small Bavarian town produce all of that? And what does it mean that those three stripes were purchased, in 1952, for the equivalent of €1,600 and two bottles of whiskey?

• 2. Brothers and a Bicycle

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  In July 1924, Rudolf Dassler joined his brother Adolf in the family shoe business, which became the Gebrüder Dassler Schuhfabrik, or Dassler Brothers Shoe Factory. The electricity supply in Herzogenaurach was so unreliable that the brothers sometimes powered their equipment using pedal power from a stationary bicycle. From that improvised workshop, they built a company that was selling 200,000 pairs of shoes every year before the Second World War. Adolf's focus was spiked running shoes. He moved away from heavy metal spikes toward canvas and rubber, a shift that made the shoes lighter without sacrificing performance. His greatest early coup came in 1936, when he persuaded American sprinter Jesse Owens to wear his handmade spikes at the Berlin Summer Olympics. Owens won four gold medals. The name Dassler spread through the world's sporting community almost overnight. The war then intervened in ways the brothers could not have anticipated. Both joined the Nazi Party in May 1933 and joined the National Socialist Motor Corps. Adolf took a rank in the Hitler Youth from 1935 until the end of the war. The company ran the last sport shoe factory still operating in Germany during the conflict, and it predominantly supplied the Wehrmacht. In 1943, shoe production stopped entirely; the factory and its workforce were redirected to making anti-tank weapons. From 1942 to 1945, at least nine forced labourers worked at the company's sites. The factory was nearly destroyed by American forces in 1945. It survived because Adolf's wife persuaded the incoming soldiers that her husband's business was interested only in making sports shoes. The American occupying forces soon became major customers.

• 3. The Town of Bent Necks

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  The split between Rudolf and Adolf Dassler came in 1947, after relations between them collapsed. Adolf registered Adidas AG on the 18th of August 1949, taking his nickname Adi and the first three letters of Dassler. Rudolf formed a separate firm he initially called Ruda, after his own name, before rebranding it as Puma. Herzogenaurach was divided so sharply by the feud that it earned the nickname "the town of bent necks" because residents looked down at strangers' feet to see which brand they wore. The town's two football clubs were recruited into the rivalry as well: ASV Herzogenaurach backed Adidas, while 1 FC Herzogenaurach endorsed Rudolf's shoes. When tradesmen were summoned to Rudolf's house, they would arrive wearing Adidas shoes; Rudolf would send them to the basement to collect a free pair of Pumas. The two brothers never reconciled. They are now buried in the same cemetery in Herzogenaurach, positioned as far apart from each other as the grounds allow. The competition flared across international sport throughout the 1950s and 1960s. At the 1960 Summer Olympics in Rome, Puma paid German sprinter Armin Hary to wear its shoes in the 100-metre final. Hary had previously worn Adidas and had asked Adolf for payment; Adidas declined. Hary won gold in Pumas but then changed into Adidas shoes for the medals ceremony, hoping to collect from both sides. Adolf Dassler was so furious that he banned the Olympic champion. The rivalry's most theatrical episode was the so-called Pelé Pact, in which both brothers agreed before the 1970 FIFA World Cup not to compete for a sponsorship deal with Pelé, judging the cost of a bidding war prohibitive. Puma broke the pact and signed him.

• 4. The Three Stripes

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  Adidas acquired its three-stripe mark in 1952, buying it from the Finnish sporting goods brand Karhu Sports for two bottles of whiskey and the equivalent of €1,600. Adolf Dassler came to call Adidas "The three stripes company", and the simplicity of the branding proved durable enough to outlast decades of fashion cycles. A 1971 design produced what became known as the Trefoil logo, which launched in 1972 just as Munich was hosting the Summer Olympics. That logo remained the company's primary mark until 1997, when Creative Director Peter Moore's "three bars" design replaced it, initially on the Equipment product range. The stripes generated legal contests. In 2003, Adidas challenged a competitor in a British court over a two-stripe motif it considered too similar to its own mark. The court agreed, ruling that even a simplified version could mislead the public into associating it with Adidas. A separate dispute in 1998 saw Adidas sue the NCAA over rules restricting the size and number of commercial logos on team uniforms; that case was eventually settled through agreed guidelines on what three-stripe configurations would count as Adidas trademarks. The false backronyms that circulate online, claiming that Adidas stands for "All Day I Dream About Sports" or "All Day I Dream About Sex", have no basis in fact. The name was always derived from Adi Dassler.

• 5. The Tapie Interlude

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  Horst Dassler, Adolf's son, died in 1987, and the period that followed was turbulent enough to leave the company vulnerable. In 1990, French businessman Bernard Tapie bought Adidas for the equivalent of €243.9 million, borrowing the entire sum. Tapie was known at the time as a specialist in rescuing failing companies, and he had built his personal fortune on that reputation. He moved production to Asia and hired Madonna for promotional work. The arrangement unravelled quickly. By 1992, Tapie was unable to meet his loan interest payments and instructed Crédit Lyonnais to sell Adidas. The state-owned bank converted his outstanding debt into equity in the company, an approach that was unusual even by French banking standards of the time. The transaction was reported to have been driven partly by Tapie's political position: he was serving as Minister of Urban Affairs in the French government. Robert Louis-Dreyfus, a friend of Tapie's and the president of Olympique de Marseille, became CEO of Adidas in 1994, the same year Tapie filed for personal bankruptcy. Tapie went on to face multiple lawsuits, including those connected to match-fixing at his former football club. In 1997, he served six months of an eighteen-month prison sentence at La Santé prison in Paris. The financial reckoning for Crédit Lyonnais came in February 2000, when the bank sold its Adidas stake to Louis-Dreyfus for 4.485 billion francs, which was substantially more than the 2.85 billion francs Tapie had originally owed.

• 6. Expansion and Acquisition

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  Louis-Dreyfus rebuilt Adidas methodically. He quadrupled revenue to €5.84 billion between 1993 and 2000, when he announced his resignation due to illness. Under his leadership, Adidas acquired the Salomon Group in 1997, renaming itself Adidas-Salomon AG and picking up the TaylorMade and Maxfli golf brands in the process. Salomon was sold in May 2005 for €485 million to Amer Sports of Finland. That same August, Adidas declared its intention to acquire Reebok for $3.8 billion; the deal completed in January 2006 and moved the company into genuine rivalry with Nike for the North American market. In 2005, Adidas also released the Adidas 1, which it marketed as the world's first production shoe to incorporate a microprocessor. The chip was capable of performing 5 million calculations per second and automatically adjusted the shoe's cushioning. A battery the wearer could replace themselves lasted approximately 100 hours of running. A revised version released on the 25th of November 2005 added a wider cushioning range and a motor with 153 percent more torque. The English fashion designer Stella McCartney launched a joint-venture line with Adidas in September 2004, focused on sports performance clothing for women. In April 2006, an eleven-year deal worth over $400 million made Adidas the official uniform provider for the NBA. In August 2015, the company acquired the fitness technology firm Runtastic for approximately $240 million. Reebok was eventually sold in March 2022 to the Authentic Brands Group for approximately $2.5 billion.

• 7. Football, Fabric, and Controversy

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  Since 1970, Adidas has supplied the official match ball for every FIFA World Cup. The Adidas Telstar was the first. The Teamgeist ball supplied for the 2006 tournament in Germany attracted particular notice because it travelled further than previous designs when struck, producing longer-range goals; goalkeepers generally complained that it moved unpredictably in flight. The Jabulani for the 2010 World Cup was developed with Loughborough University in conjunction with Bayern Munich. The Brazuca for 2014 was the first World Cup ball whose name was chosen by fans. In 2022, for the fourteenth consecutive time, Adidas produced the World Cup ball, naming it Al Rihla. The Copa Mundial boot, released in 1979 for firm dry pitches, holds the distinction of being the best-selling football boot of all time. The kit deal Adidas signed with Manchester United in July 2014, worth a guaranteed minimum of £750 million over ten years, was the most valuable kit deal in sports history at the time of signing. The company's supply relationships have also attracted sharp criticism. Workers at the Panarub factory in Java were fired after a strike in 2005. At the PT Kizone factory in Indonesia, which closed in January 2011, 2,686 workers were owed $3 million in severance pay; Adidas did not contribute while Nike paid $1.5 million. In 2012, activists organised by War on Want replaced Adidas price tags in London sports shops with 34p labels, citing the hourly wage paid to Indonesian workers. In June 2012, a planned shoe designed by Jeremy Scott that featured leg shackles prompted public outcry, including a statement from Jesse Jackson invoking the history of slavery; the company cancelled the product. In July 2024, an advertising campaign for the SL 72, a shoe originally created for the 1972 Munich Olympics, was withdrawn after it was linked in the public mind to the massacre of eleven Israeli athletes at those Games. Adidas apologised.