Kasper Rorsted comes in a gray-flecked Adidas hoodie, Björn Gulden in a blue Puma tracksuit top. Both CEOs wear their brands’ sneakers and jeans. If it weren’t for the crucial difference, the respective logo on the lapel, you could very well say that the two bosses of the biggest German sporting goods manufacturers virtually look like partners at this historic meeting in the Technical University of Nuremberg, the first joint public appearance by these heads of these two once hostile global companies from Germany’s Franconian Herzogenaurach.
Denmark’s Kasper Rorsted and Norway’s Björn Gulden also want to use their symbolic appearance at the “NN” (Nuremberg News) talk to make clear that the time of embittered rivalry between the two neighbors, upon which the companies’ histories have been based since the falling out of brothers and company founders-turned enemies Adi and Rudi Dassler, is over. Kasper Rorsted, with Adidas since 2016, and Björn Gulden, Puma chairman since 2013, are taking the soft line approach, quite literally. They embrace and crack jokes, they applaud one another at pointed statements – and once, the bosses of Adidas and Puma even exchange high-fives at this historic meeting in the auditorium of the Technical University of Nuremberg.
All just a show? It doesn’t seem like it. And yet there are clear differences between Kasper Rorsted and Björn Gulden on the current questions in the sports business – and not just in terms of company size and revenue. ISPO.com listened.
Hostility is no longer an issue. Kasper Rorsted even wants there to be “absolutely zero rivalry” understood between competitors Adidas and Puma. “That doesn’t exist in my world,” says the Adidas boss. “I hope that customers buy our products – but if not, better they buy with Puma than somewhere else.” The kind of approach you’d probably never have heard from Adi Dassler – nor the reply from his brother Rudolf given here by Puma head Gulden: “Sure, we’re competitors. We’d like to become better than them. However, we have a very good relationship. If someone other than us is to be successful, then it’s Adi! We truly believe that.”
Nice words that fit the image of convergence – but don’t represent the business where many a dispute over brand and patent rights goes to court, the sole battle from 2016 for example? “That’s always the case when two big companies are in competition. That’s a part of the day-to-day business, but it doesn’t strain the climate,” says Rorsted. He laughs when Gulden adds, “Our legal departments need to have something to do, after all.”
There’s a lot being built in Herzogenaurach right now. Adidas and Puma aren’t just investing in legs, but also in stones – at the company headquarters. A clear acknowledgement of the location of Herzogenaurach, which both also underpin with statements. “Just thinking about” relocating the company headquarters from the small Franconian town to a metropolis, Munich or even London, “would be making a big mistake,” says Kasper Rorsted about Adidas: “We live off of our history. We’re proud of it. People feel comfortable here. We belong to Herzo,” as they call Herzogenaurach.
Björn Gulden applauds and says, “In the mid-90s there was some contemplation of going to Munich. It’s good that we stayed in Herzo - our roots are here.”
The two companies from Herzogenaurach are global companies; Adidas generates 95 percent of its revenue outside of Germany. And of course there’s been notice of how Nike, the global market leader, was criticized for its tax avoidance schemes upon publication of the “Paradise Papers” in Germany.
“That was no surprise for us, we knew what they were doing. It is in the business reports,” says Adidas boss Rorsted, who instead criticizes lawmakers: “If the state wants to change something, it should change the laws. The governments have to adopt laws and make sure that they’re adhered to. We’re all global companies, we all need to be globally competitive.”
Globalization and digitization have also completely changed the sporting goods market in the past few years. Asia has long since become the market of the future for both Adidas and Puma, even the market of the present: “We’re seeing overproportionate growth in China and India,” says Puma CEO Björn Gulden.
Read here: This is the Indian sports market
Kasper Rorsted concurs: “Our business is exploding online: We’re making 1.5 billion euros in revenue online worldwide. In China, we made 80 to 100 million euros in revenue on Singles Day alone – in one day!” He then holds up his smartphone and says, “The primary shopping devices are mobile devices. In the future, deliveries will be made to customers via mobile devices on the same day, in just a few hours.”
“Forever faster,” is Puma’s claim; Adidas plans to focus primarily on the issue of production. Keyword Speedfactory, keyword sports shoes from the 3D printer. Adidas has built a fully automated factory in Ansbach, Germany. Individual, customized shoes can be specially created for each customer, “for a corresponding surcharge.” Kasper Rorsted says these kinds of custom running shoes, created using a foot scan, can then cost from 300 to 350 euros. Rorsted recognizes an “enormous capability for digital manufacturing processes in Germany.” However, he also says, “Shoe production will not return to Germany.” The expertise of the employees in Asia, where all brands operate the majority of their production work, is said to be much more prominent than in Europe.
Fast factory? They still aren’t ready at Puma. And according to Gulden, a location like Ansbach would also be out of the question: “If we were to make a Speedfactory, it would more likely be in China.” The same argument: “Germany and Europe are less competent in shoe production by far.”
What actually are the products that the brands like Adidas and Puma are focusing on in the global market today? Are they still sports brands, or are they already and above all in fashion? Kasper Rorsted on Adidas: “We’re a sports company. Period. End of story.” And: “We want to be the best sports company in the world.”
But haven’t lifestyle products long since dominated the sports sector? “Sports are the focus, but sports and fashion sell together,” says Puma boss Björn Gulden. “The influence of fashion on sports is very great.” He names two examples from his globalized world: “Every American has four pairs of running shoes on average – but most Yanks don’t even run.” And: “In China, more and more women are practicing sports. And they want to look good doing it, too.”
Both Adidas and Puma primarily reach their target customers via influencers and brand ambassadors. One big advertiser from active sports has just bowed out at Puma: Olympic champion Usain Bolt (Björn Gulden: “If he were a basketball player instead of a runner, he would have been the best-paid athlete in the world. His problem is that Spikes still haven’t found their way into the fashion world”) has retired. Gulden thinks this is more of an opportunity than a downside for Puma: “Usain Bolt will stay with us his entire life. And now he’ll likely have more time for us, he’ll become more visible.” A lifestyle collection, for example, could be possible.
Bolt will “always be a part of the Puma family,” says Gulden, “just like Lothar Matthäus and Boris Becker.”
Read here: How the Usain Bolt business is going
The Norwegian criticizes the fact that precisely these two exceptional athletes, Matthäus and Becker, had a difficult time in German public life after retirement: “Don’t tear down your heroes. Don’t wear them out! These are supertypes, superhumans. We value both of them very much.” So much so that the Puma boss, in the current case of Boris Becker, whose debt problems aren’t just being exploited by the media in England, makes a profession: “If Boris asks, we would help. We can’t pay all of his debts in full, but he’d get support from Puma. He’s a part of the Puma family. He can call me.”
Does Puma boss Gulden’s profession in the case of Boris Becker have a counterpart at Adidas for Franz Beckenbauer? “Franz Beckenbauer will always be a part of our family,” says CEO Kasper Rorsted on the luminous soccer figure, who’s under pressure from both tax and World Cup issues. Beckenbauer’s long absence from Herzogenaurach, and the fact that he’s currently not in any advertising campaigns, is more due actually due to his health.
In any case, Rorsted isn’t publicly distancing himself: “We have him to thank for so much; he made the brand internationally famous. Our long relationship matters. Franz Beckenbauer was always loyal to us, and we owe him loyalty, too. Others will have to judge if and how he’s made mistakes.”
Adidas head Kasper Rorsted applauded when his Puma colleague, Björn Gulden, offered help for Boris Becker. And Gulden clapped when Rorsted professed his loyalty to Franz Beckenbauer. These scenes weren’t the only ones that showed that Adidas and Puma have rarely been so close.
More similarities between the bosses of Adidas and Puma? Well, in private at least, they show certain differences. Björn Gulden lives in a hotel in Herzogenaurach, while his family remains in Norway. Kasper Rorsted has an apartment at the company headquarters – and a house on Lake Starnberg, where his family lives. The Adidas CEO treats himself to 35 days of skiing per year, “from November to May, every other weekend,” and he bikes to work early every morning at 5:30 – in order to then take an hour of exercise: “I’m at the gym at 5:50, every morning.”
“That’s when I’m leaving the bar,” jokes Björn Gulden, the former professional soccer player. “Okay, I’m at the gym at 6:15.”