Adidas shares are trading lower, Tuesday, as the sportswear specialist has agreed a branding deal with Swedish audio products manufacturer, Zound. The deal comes as Adidas continues to increase its foothold in the lifestyle industry, alongside it’s sporting roots.
By 1205 BST, Adidas shares were 2.07% lower at €175.10. The Adidas stock price remains above the level it began 2018.
Adidas deal to end in 2024
The German-based sportswear brand has agreed a licensing deal with Zound, whereby the audio products business will manufacture headphones under the Adidas Badge of Sport and Originals labels.
Zound will design, develop, manufacture and market the new headphones -the first of which are expected to be available in 2019.
“This marks the next chapter for Zound Industries as we look to further strengthen our position as a leader within the sport and lifestyle headphone segments,” said Zound Industries CEO, Pernilla Ekman.
“The licensing agreement with adidas enables Zound Industries to do this with one of the most iconic, reputable and well-established global Brands in the world”, Ekman added.
The Zound press release adds this deal comes at a time when the sports headphones segment of the global headphones market is “showing strong growth”.
Adidas broadens brand appeal
The decision for Adidas to team up with Zound comes as the sportwear brand shows increasing signs of further growing its brand name outside of its traditional sporting arena.
By choosing to lend its branding to headphones, Adidas will also be in some small competition with Apple, who bought Beats headphones in 2014.
Meanwhile, finding ways to benefit from continued growth of the Adidas Originals brand is likely a key benefit for Adidas, in this deal.
The German-based firm also stated in its November Q3 earnings report, that eCommerce was a positive driver of profits – adding products that can easily help ensure its brand is increasingly visible online, is a likely another potential benefit from this latest Zounds deal.