Nike just nabbed one of Adidas’ biggest contracts

July 7, 2015, 2:42 PM UTC
Michigan Football Spring Game
ANN ARBOR, MI - APRIL 04: Head coach Jim Harbaugh of the Michigan Wolverines looks on during the Michigan Football Spring Game on April 4, 2015 at Michigan Stadium in Ann Arbor, Michigan. (Photo by Gregory Shamus/Getty Images)
Photograph by Gregory Shamus — Getty Images

Nike just swooshed its competitor Adidas out of a major deal.

The Beaverton, Ore.-based sportswear-maker has won the right to equip the University of Michigan’s sports teams with athletic gear until 2027. The agreement also stipulates that Nike (NKE) has an option to extend the contract until 2031.

The partnership, which commences in August of next year, will stock the “M Den,” the school’s official athletics retailer, with Nike-made apparel. The school says it hopes the deal will also bring student internship opportunities at the company as well as design and technology collaborations.

​”After careful consideration, the right partner for the University of Michigan was Nike” interim athletic director Jim Hackett (no known relation to the author) said in a statement. “This decision, this partnership is about more than Michigan athletics; at the core, it is about our University community and it is about two great names reuniting for an opportunity that speaks to more than uniforms and apparel. Nike is a recognized leader in its field when it comes to product innovation and we look forward to future collaboration.”

Adidas (ADS), the $16 billion-a-year German sportswear company, has lately been struggling to reclaim market share from rival frontrunner Nike—not to mention the ascendant Under Armour (UA). Part of the apparel-maker’s recently unveiled turnaround plan involves picking up sales in North America, landing big athletic partnerships, and boosting automation within its production lines. Losing the University of Michigan deal—”a crown jewel” of the company’s U.S. contracts, as the Wall Street Journal calls it—will be a major blow.

Adidas North America president Mark King told WSJ that the loss is unfortunate, but that the company would rebound. “Obviously we’re very disappointed that Michigan didn’t choose us,” he said, “but we can probably sign four or five really wonderful schools as we go forward.”

The defeat for Adidas follows Nike’s big branding victory during this weekend’s Women’s World Cup final—a victory concomitant with the stunning success of the U.S. team. After the game, Fortune writer-reporter Daniel Roberts described Nike’s social media success as “a real blow for Adidas, which is the official apparel sponsor of the FIFA World Cup.”

You can read more about Adidas’ attempts to reclaim its glory in the June 1, 2015 issue of Fortune magazine.

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