Adidas shock as CEO to step down despite contract to 2025

German sporting goods firm reels from years of lockdowns and consumer boycotts in China

Adidas CEO Kasper Rorsted was due to stay on until 2025.

Adidas announced the surprise departure of chief executive Kasper Rorsted next year, forcing the search for a new leader as the German sporting goods company reels from years of lockdowns and consumer boycotts in China.

The Adidas board and Mr Rorsted have “mutually agreed” that he would hand over the top job in the course of next year, according to a statement. Mr Rorsted, whose contract was renewed in 2020 for five years, will remain CEO until a successor has been appointed to ensure a smooth transition.

When Mr Rorsted took over in 2016, investors applauded the choice because the Danish-born executive came with a strong track record of boosting returns and tightening the portfolio at consumer-goods company Henkel.

At Adidas, Mr Rorsted managed to narrow the gap with arch-rival Nike, while selling perennial underperformer Reebok, though the last years were marked by difficult conditions because the coronavirus closed retail outlets and production around the world, particularly in key Asian markets.

Adidas shares have lost about 37% in value this year, ranking them among the worst performers on the 50-member Euro Stoxx 50 Index. The shares slumped as much as 4% in Frankfurt on Monday following the announced CEO change.

During his tenure at Adidas, Mr Rorsted presided over a steady increase in the shares, valuing the company at more than €67bn around this time just last year. Since then, the shares have come back to levels similar to when he took over in 2016. By contrast, Nike and Puma shares have gained in the same period.

Mutual decision

Mr Rorsted’s departure was a mutual decision of the supervisory board and the CEO following confidential discussions, people close to the matter said.

Mr Rorsted felt worn out after steering Adidas through Covid, when he drew public criticism for skipping rent payments for Adidas stores, said the sources. Adidas declined to comment beyond the press statement.

Besides the pandemic slump, Mr Rorsted had to contend with criticism that the company had done too little to promote diversity.

In June of 2020, Adidas human resources chief Karen Parkin, a company veteran of more than two decades, resigned after acknowledging that she wasn’t right person to lead efforts to create a more diverse workplace following criticism in particular from Black employees.

“After three challenging years that were marked by the economic consequences of the Covid-19 pandemic and geo-political tensions, it is now the right time to initiate a CEO transition and pave the way for a restart,” the company said in the release announcing Rorsted’s departure.

Bloomberg