Ex-champion awaiting a comeback

IN SPORTING terms, Pentland has inherited a star whose best days are behind him but who is ripe for a comeback.

In its heyday under the leadership of Horst Dassler, Adidas was by far and away the world's most powerful sporting goods company. At the Mexico Olympics in 1968 it was estimated that 83 per cent of all competitors were wearing Adidas shoes.

As one envious rival put it: 'Those damned three stripes stand out on a track like like a Rolls-Royce in a second-hand car lot.'

But Adidas was much more than a hugely successful commercial giant. Through his network of contacts, Dassler acquired vast political influence through the sporting world. He helped shape world football and was the brains behind the marketing of the Olympic Games. He had a strong influence on the Games' transition from amateurism to the money-making extravaganza they are today.

Since his sudden death in 1987 at the age of 51, however, Adidas has been in decline - even if it still shoes the feet of more Olympic stars than any of its rivals.

Control passed initially to Dassler's three sisters in Germany, who had had none of his flair and dynamism. And, although sales remained remarkably steady at around DM3bn a year, profits collapsed. In 1990, the year Bernard Tapie took over, the company was actually losing money.

The problem was that Adidas was far slower than its rivals, Nike and Reebok, to latch on to the American and European boom of the 1980s when trainers became high fashion objects with great street cred.

The company also continued with high-cost manufacture in Europe long after its rivals had switched to cheaper Far Eastern sources of supply.

Since then there has been a small recovery and Adidas returned to profit last year. But there is still a long way to go before it can begin to match the returns that Nike and Reebok enjoy.

'While Nike and Reebok make a profit of around 15 per cent on turnover, the figure for Adidas is a measly 1 per cent,' Mike Costello, an analyst with Kleinwort Benson, said.

'It is a measure of Adidas's relative weakness that its operating costs were higher than Nike and Reebok last year while the amount spent on promotion was lower.'