(Bloomberg) -- Adidas AG aims to increase its sales by 40 million pairs of sneakers annually, to more than a half-billion by 2020, largely by appealing to fashion-conscious teens and urban hipsters. At the heart of that effort: a decades-old shoe named after a retired tennis player who lives in South Carolina and hasn’t won a major singles tournament since 1980.
The shoe is the Stan Smith, a white-leather number with pale green accents introduced in 1971, the year before Stan Smith (the player, now 70) earned his second and last Grand Slam singles title. Thanks to a well-orchestrated promotional blitz, this unlikely hero has made one of the greatest comebacks in marketing history, from a declining brand popular with suburban dads into a must-have for the fashion-savvy. As they rev up an effort to catch Nike Inc., Adidas executives are seeking to replicate parts of the campaign to stoke interest in other shoes. “We wanted to position it anew with fashion designers and trendsetters,” says Arthur Hoeld, who heads Adidas’s brand strategy and business development. “This is part of the concept -- to push boundaries, to experiment.”
As Adidas was planning the Stan Smith revival about five years ago, the shoe was still selling, though it was showing up more often at discount stores. The feeling around the company was that the model had lost its mojo, but Hoeld and a handful of other executives saw its potential, their confidence bolstered by reports that Phoebe Philo, creative director of the Céline fashion house, had been spotted sporting Stan Smiths at her shows. So Hoeld’s team outlined a campaign designed to look grassroots but which was in fact choreographed from start to finish with a goal of making the shoes de rigueur for people whose parents may be too young to recall the last time Smith played at Centre Court.
The first step was counterintuitive: Adidas pulled the shoe from the market in 2012, leaving customers with the impression the move was permanent. By mid-2013, Stan Smiths were almost impossible to find, prompting angry letters from fans -- and spurring Smith and some on Hoeld’s team to question the wisdom of the plan. Late that year, Adidas began shipping a new version to dozens of celebrities it had worked with, including singer A$AP Rocky, designer Alexander Wang, and talk-show host Ellen DeGeneres. The freebies included a personalized touch intended to get the stars to wear them: A drawing of Smith on the tongue was replaced by an image of each recipient. Adidas struck gold in November 2013, when French Vogue featured model Gisele Bündchen sporting nothing but a pair of white socks -- and Stan Smiths. About the same time, Adidas released a two-minute web video featuring actors and sports stars waxing poetic about the sneakers. “People think I’m a shoe,” Smith laments in the clip, recalling that his son once asked, “ ‘Dad, did they name the shoe after you or you after the shoe?’ ”
The first new models, priced at about $90, hewed closely to the simplicity of the original, with a white body and a touch of color on the tongue and heel. In early 2014, Adidas started shipping them to shops catering to hardcore sneaker fans, followed by specialty footwear retailers and, months later, department stores and big-box outlets. Later that year, the company steadily added spinoffs -- Stan Smiths in high heels, faux crocodile skin, and honeycomb leather, as well as 10 pairs hand-painted by singer Pharrell Williams and sold at the Colette fashion boutique in Paris for €500 ($545). In 2015, Adidas introduced variants aimed at specific age groups and tastes: simulated ostrich leather, Velcro closures, white with pink accents, blue pony hair heel tabs -- even one featuring Kermit the Frog. “We want a consumer to buy three or four or five pairs,” says Eric Liedtke, Adidas’s global brand chief.
Adidas aims to increase revenue to more than €25 billion in 2020, from €19.3 billion in 2016. The Stan Smith has been a big help. Sales of the shoe jumped dramatically, to 8 million pairs, in 2015, bringing total sales over the past four decades to more than 50 million. While the company hasn’t released figures, researcher NPD Group Inc. estimates U.S. sales rose fivefold last year. Adidas says sales of its Originals collection, which includes the Stan Smith and another top-selling retro model called the Superstar, popularized by rappers Run-DMC, increased by 80 percent in the U.S. last year, more than three times faster than footwear for team sports such as basketball and American football.
Analysts estimate that the company will report a 13 percent increase in first-quarter sales when it provides a financial update Thursday, helped by strong momentum for shoes from the Tubular, NMD and Boost lines.
Dipping into the archives isn’t rare in sports fashion. Adidas created the Originals line more than a decade ago, selling everything from shiny ’70s track suits to Gerd Müller soccer shoes. Smaller rival Puma SE went further by collaborating with designers such as Alexander McQueen. As the concept of sports fashion became ubiquitous -- Prada SpA, Louis Vuitton, and other brands now sell luxury sneakers -- Puma alienated serious athletes looking for shoes aimed more at improving performance on the track than the runway. Over the past decade, Puma’s profit margin has collapsed from more than 25 percent to about 5 percent today.
As sales of the Stan Smith and the Superstar start to wane, Adidas plans to pump up other throwbacks from the back of its closet: the 1950 indoor soccer shoe Samba, the suede Gazelle dating to the 1960 Rome Summer Olympics, and the Campus, worn by one of the Beastie Boys on the cover of 1992’s Check Your Head. Adidas has “great retro shoes in the vault,” says NPD analyst Matt Powell. And at least one former skeptic has come around to the idea. “I thought there was no way 14- to 24-year-olds would relate to me, so I thought it was a bad strategy,” Smith says. “I’ve been proven wrong. Big time.”
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