FUERTH, Germany (Reuters) - Adidas (ADSGn.DE) shareholders elected Egyptian tycoon Nassef Sawiris and a representative of Belgium’s richest man Albert Frere to the supervisory board on Thursday after both took significant stakes in the German sportswear group.
Frere and Sawiris, along with U.S. investor Mason Hawkins, bought major stakes in Adidas last year after shares in the firm had tumbled following a series of profit warnings as it failed to keep pace with bigger U.S. rival Nike(NKE.N).
Since then, Adidas has decided to sell its struggling golf business and has appointed former Henkel (HNKG_p.DE) boss Kasper Rorsted to take over as chief executive in October, succeeding Herbert Hainer after his 15 years at the helm.
Rather than speaking out in public, the new investors have sought to influence the company behind the scenes.
Ian Gallienne, the head of Frere’s holding company Groupe Bruxelles Lambert (GBLB.BR) who is also a board member at French drinks firm Pernod Ricard(PERP.PA), told the annual general meeting he was engaged in “constructive dialogue” with management.
Speaking in fluent German, Sawiris told the meeting he hoped his knowledge of emerging markets and financial expertise would help strengthen the board: “I am looking forward to successful cooperation,” he said.
Some investors have said the Adidas board, dominated by German consultants and union representatives, has lacked the clout of Nike, whose board of directors includes heavyweights such as Apple (AAPL.O) chief executive Tim Cook.
Gerhard Jaeger, spokesman for the SdK investor association, told the shareholder meeting that Adidas had made major strides in the last year, but said Rorsted still had a major task ahead of him, particularly to improve profitability.
“The weakness is still the margin... the competition shows how it should be done. Adidas is still a world away from Nike,” Jaeger said.
However, he added that he would welcome Hainer joining the supervisory board as possible successor to Chairman Igor Landau after a cooling-off period.
Investors have high hopes for Rorsted, hoping he will cut costs and also consider a disposal of long-struggling fitness label Reebok, which Hainer acquired in 2005.
Adidas shares were up 1.4 percent at 1243 GMT, bringing their gains this year to almost 28 percent.
Hainer admitted that the profitability margin was “not good enough” and said the team was working hard to improve it, wishing his successor Rorsted “lots of luck” in this regard.
Reuters reported in December that Sawiris had formed a partnership with Hawkins to spur boardroom change and influence strategy at companies they invest in, including Adidas.
According to Thomson Reuters data, Frere has a 5 percent stake in Adidas, Sawiris’ NNS Holding has a 3 percent stake and Hawkins owns 2.9 percent.
Additional reporting by Victoria Bryan in Berlin and Joern Poeltz in Munich; Editing by Georgina Prodhan, Jane Merriman and Alexandra Hudson