Adidas and Puma’s Retro Terrace Sneakers Trend Could Challenge Nike, but U.S. and Chinese Demand Weakens
WHAT YOU SHOULD KNOW
- Adidas and Puma are capitalizing on the trend of low-rise rubber-soled “terrace” sneakers by re-releasing old styles from the 1970s and 1980s in new colors, driving increased interest in these heritage shoes.
- Google Trends data reveals a surge in searches for “Adidas Samba” and other terrace styles, indicating strong consumer interest worldwide.
- While terrace shoe sales are growing, they still represent a small portion of the overall business for both Adidas and Puma. Investors are looking for broader strategies to address weakening consumer demand, particularly in the U.S. and Chinese markets.
The resurgence of low-rise rubber-soled “terrace” sneakers has provided an advantage to German sportswear giants Adidas and Puma, potentially putting them ahead of Nike this summer. Both brands have tapped into nostalgia by re-releasing old styles from the 1970s and 1980s, generating renewed interest in these retro shoes named after soccer stadium standing sections. The popularity of “Adidas Samba,” a main terrace style, has seen a significant increase in searches globally over the past year, with a peak in mid-June, according to Google Trends data.
While Adidas and Puma are benefiting from this trend, Nike seems to be at a disadvantage due to its focus on chunky basketball shoes, such as the Jordan range, rather than having a similar historic terrace shoe collection to draw upon. Terrace shoe sales, though growing, still represent a small fraction of the overall business for both Adidas and Puma. Investors are closely watching the brands’ strategies to navigate the challenging landscape of weakening consumer demand, particularly in the U.S. and Chinese markets, as they approach their second-quarter results.
Adidas experienced a boost from the sale of discontinued Yeezy shoes, which led the company to reduce its expected operating loss for 2023. On the other hand, Puma, whose shares have lagged behind Nike and Adidas, aims to update investors on its strategy to focus on performance sportswear after a perceived overemphasis on lifestyle products. The sportswear industry has potential for further growth with the ongoing casualization of fashion and increasing consumer interest in health and fitness. However, competition is fierce, and retailers face vulnerability to fluctuations in trends and high costs to remain competitive in the market.
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