German sportswear group Adidas AG (ADDYY) has named a Danish veteran of Oracle, Compaq and Hewlett-Packard to replace its long-serving chief executive, Herbert Hainer, who will stand down six months ahead of schedule in September.
Adidas said Monday that Kasper Rorsted, currently CEO of one of Germany’s biggest consumer products companies Henkel AG (HENKY), will join in August and take over from Hainer, the longest-serving CEO in Germany’s blue-chip DAX index, in October.
The news was enough to send the company’s shares over 5% higher on a day when the DAX overall was (yet again) falling heavily under concerns about the strength of the world economy. Investors had hoped for an outsider to succeed Hainer, thinking that he would take a more radical approach to, or even sell, some of the group’s less successful operations like its Reebok fitness brand or the TaylorMade golf business.
At Henkel, which sells products from Schwartzkopff shampoo and Loctite glue to Persil detergent, Rorsted has experience of the same kind of challenge that he will face at Adidas: specifically, competing with entrenched and well-funded U.S. giants. Under him, Henkel’s share price had more than doubled from its pre-crisis peak by the end of last year–and the news of his departure made it the worst performing big stock in Frankfurt Monday.
Rorsted will be joining Adidas just as it appears to be getting over some of the disasters of the last few years. Big investments in emerging markets such as Russia have turned sour, and it has lost market share both to arch-rival Nike Inc. (NKE) and up-and-coming Under Armour Inc. (UA). It has been tarred by association with world soccer body FIFA, for whom it is one of a handful of long-standing key sponsors. Most of all, there have well-documented problems at its TaylorMade golf unit. However, the company’s fortunes have rebounded in recent months, after some big write-offs.
While some emerging markets have gone south, the company reported two weeks ago that its sales in Greater China (including Hong Kong and Taiwan) hit 2 billion euros $2.2 billion) for the first time last year, rising some 18% in the first nine months of the year. That’s in stark contrast to the fortunes of western luxury goods companies that have played to China’s wealthiest in recent years.
Rorsted, 53, is married with four children, and already lives in Munich, not far from Adidas’ headquarters in the Bavarian town of Herzogenaurach.