Adidas names Henkel's Rorsted to replace Hainer as CEO

Mon Jan 18, 2016 9:56am EST
 
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By Emma Thomasson

BERLIN (Reuters) - Adidas (ADSGn.DE: Quote) has named Henkel's (HNKG_p.DE: Quote) Kasper Rorsted as its new chief executive, boosting its shares as investors expressed hopes that the Dane has the credentials to boost profits at the German sportswear firm.

Rorsted, 53, will leave Henkel in April after eight years at the consumer goods firm and take charge of Adidas on Oct. 1, succeeding Herbert Hainer, 61, who has headed the firm for 15 years as the longest-serving boss of a leading German company.

Hainer had come under fire as Adidas has lost market share to Nike (NKE.N: Quote), particularly in the key U.S. market, and suffered from falling golf sales and its exposure to Russia, prompting the board to launch a search for a successor.

Adidas shares were up 5.8 percent by 1400 GMT, while Henkel was down 4.5 percent.

"The share price reaction speaks for itself," said Ingo Speich, a fund manager at Union Investment, which owns a 0.7 percent stake in Adidas.

"We welcome the appointment of Mr Rorsted to replace Mr Hainer and hope it means an end to the long dry spell in the profitability of Adidas," added Speich, who has long been critical of the Adidas CEO.

Adidas sales have more than doubled under Hainer but they have failed to match Nike, which forecasts revenue will rise another 63 percent to $50 billion by 2020, compared to the Adidas target of 22 billion euros ($24 billion).

Hainer has also struggled to improve profitability, with the Adidas operating margin of 6.6 percent in 2014 still half that of Nike. In contrast, Henkel's adjusted operating margin rose to almost 16 percent in 2014 from 10 percent in 2008.   Continued...

 
The logo of Adidas, the world's second largest sports apparel firm, is pictured in a store in Munich March 4, 2014.   REUTERS/Michael Dalder