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Adidas starts search to replace longtime CEO Herbert Hainer

19 February 2015 18:42 (UTC+04:00)
Adidas starts search to replace longtime CEO Herbert Hainer

By Bloomberg

Adidas AG, the world’s second-biggest sporting-goods maker, said its board has started the search for a successor to Chief Executive Officer Herbert Hainer, one of Germany’s longest-serving CEOs.

An executive search firm has been hired to find a replacement for 60-year-old Hainer, whose contract ends in 2017, Igor Landau, chairman of the company’s supervisory board, said in a statement Thursday. The search will span both internal and external candidates.

Adidas’s CEO of about 14 years has come under pressure from shareholders amid lost market share to leader Nike Inc. and a 38 percent tumble in its stock price last year. Hainer plans to unveil a long-term strategy and financial targets through 2020 in a March 26 presentation at Adidas’s Herzogenaurach, Germany headquarters.

“The supervisory board will now start to look for the best possible candidate for my succession, both inside and outside the Adidas group,” Hainer said in a letter to employees released to the press Thursday. “This will be a long-term process that has just begun.”

The search for Hainer’s successor was first reported by Germany’s Manager Magazin, which said recruiter Egon Zehnder is conducting the hunt.

Difficult Year

Adidas is trying to recover from a difficult past year in which its sponsorship of the two soccer World Cup finalists was overshadowed by a scrapping of financial targets, lost market share and an admission that it’s not competitive enough in the U.S. Hainer, who has come under fire from investors for missed financial forecasts and letting Nike gain ground in Europe, said the current year is off to a “fantastic start.”

Adidas shares rose as much as 6.5 percent to 68.86 euros in Frankfurt, leading gains in Germany’s benchmark DAX Index. The stock was up 4.6 percent as of 1:32 p.m., extending its advance this year to 17 percent.

“The market may get excited” about the prospect of faster earnings growth at Adidas, and replacing its CEO is perceived as “a positive move,” said John Guy, an analyst at MainFirst Bank AG. Possible internal candidates to succeed Hainer are global brand director Eric Liedtke, an American, and sales head Roland Auschel, a German, according to Guy.

Manager reported that Adidas would seek to add 5 billion euros ($5.7 billion) in sales to reach 20 billion euros by 2020 and target a 10 percent operating margin, partly by focusing on sales in large cities including New York, Shanghai and London.

Adidas spokeswoman Katja Schreiber declined to comment on the company’s new financial goals, or the search firm.

Sales Target

Analysts expect revenue at Adidas to increase to 20 billion euros in 2020, from 14.7 billion euros last year, according to estimates compiled by Bloomberg. The company last summer scrapped a 2015 target of an 11 percent operating margin and has bought back shares to appease investors.

In his letter, Hainer said his mandate includes keeping the company “on our growth track for 2015 and beyond.”

The CEO also pointed to changes he’d made including new managers reporting to Liedtke and Auschel and combining supply chain and computer operations under another executive.

“I am conscious of the fact that all these changes were anything but easy and it was not always fun to implement them,” he said in the letter.

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