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Adidas CEO says to stay until end of contract in 2017

HERZOGENAURACH, Germany (Reuters) - Adidas ADSGn.DE Chief Executive Herbert Hainer plans to stay until the end of his contract in March 2017 even though the board is looking for a successor, saying he expects bumper sales in his last full year in office.

Herbert Hainer, chief executive officer of Adidas, the world's second largest sports apparel firm, holds his speech during company annual general meeting in the northern Bavarian town of Fuerth near Nuremberg, Germany, May 7, 2015. REUTERS/Michaela Rehle

Hainer has been in his job since 2001 as the longest-serving boss of a German blue-chip and early last year the Adidas board extended his contract to 2017.

But he has come under fire after the sportswear group lost market share to Nike NKE.N and suffered from falling golf sales and its exposure to Russia. In February, the board said it had launched a search for a successor.

Since then the pressure on Hainer has abated as Adidas’s sales have rebounded in the important U.S. market.

At a news briefing, Hainer said much had changed and he was upbeat for 2016, noting that the share price had risen 60 percent in the last year, to make it one of the strongest performers in the German DAX index .GDAXI.

“I have never seen the order books as full in my 15 years here,” Hainer said. “I am extremely optimistic as I know what we’ve sold for the first six months (of 2016).”

Hainer said he did not feel under pressure from high-profile new investors the world’s second biggest sportswear brand has attracted in the last year, saying he met with them regularly.

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“Investors are all satisfied,” he said. “What all really like is the Adidas brand. It is such a strong brand and it has such a sheen. That is what really interests them.”

Reuters reported last week that Egyptian tycoon Nassef Sawiris has formed a partnership with U.S. investor Mason Hawkins and his colleagues at Southeastern Asset Management to drive change at companies including Adidas.

The new entity plans to build stakes in up to 10 European companies it deems to be underperforming to spur boardroom revamps and influence strategy, one source said.

Although Adidas shares are up strongly this year, they still trade at a discount to Nike.

But Hainer is not in any hurry to step down, saying the board is taking its time to consider external candidates as well as internal ones.

“Of course I will stay until the end of my contract,” he said, adding he had doubled sales and profit at Adidas in the last decade. “At some point an announcement will come and then we will see how quickly the person can come.”

Hainer repeated his rejection of calls from some investors for Adidas to sell the long-struggling Reebok fitness brand he bought in 2006, saying the business was now growing at double-digit rates everywhere except in North America.

He also denied a media report that Adidas was preparing to sell its ice hockey equipment business, saying there was no current sales process although there were always people interested in the business.

After slipping last year into third place in the U.S. market behind Nike and fast-growing Under Armour UA.N, Adidas has hiked marketing spending in North America by 50 percent in the first nine months of the year, Hainer said.

Hainer said he expected the core Adidas brand to grow by 10 percent or more in North America in 2016, up from 8 percent in the first nine months of 2015, while sales of football kit should also rise at a double digit rate.

North America is Adidas’s second biggest market in terms of sales after Western Europe, based on third quarter sales.

Reporting by Emma Thomasson. Editing by Jane Merriman

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