Adidas and Puma will probably raise running footwear and sportswear in the United States, following Nike’s example, analysts and investors said Thursday, since American tariffs on imports increase costs for retailers.
Nike on Wednesday announced that the prices would rise next week, charging up to 10 dollars more for footwear that currently costs more than $ 150, while maintaining stable prices for products of less than $ 100. It is the largest sportswear and stock capitalization company.
“That was the time that Adidas and Puma were waiting for,” said Robert Krankowski, UBS sporting articles analyst.
Both German sportswear brands recently said that they would not be the first to increase prices, but would wait to see what their rivals do.
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“We should probably expect a similar decision from both Adidas and Puma because (…) this is not an exclusive problem of Nike, it is a problem of industry. All will be affected by tariffs,” Krankowski added.
President Donald Trump imposed a widespread tariff of 10% to all imports and applied to China a higher tariff, of 30%. Even more worrying for sportswear brands is that Vietnam, the main manufacturing center of footwear and clothing, faces the threat of a 46% tariff that will be applied again in July.
Nike described the price increases announced as part of its normal seasonal planning, not to mention rates.
This Thursday Puma announced that he is in conversations with his American partners, but he has not yet decided whether he will adjust prices or how he will. Adidas did not immediately respond to a request for comments on his price plans.
“Historically, when the leading brand adjusts its prices, competitors tend to follow their example shortly after,” said Federico Borin, an analyst at Janus Henderson.
The degree to which other brands increase their prices will depend on their evaluations of the willingness to pay from American buyers, which varies according to the demand for their sports or running shoes.
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Adidas, who has enjoyed an increase in sales thanks to fashion vintage shoes such as the 100 dollars samba and the 120 dollars gazelle, could easily raise prices, said Simon Jaeger, Flassbach Von Storch portfolio manager in Colonia, Germany, who has actions of Adidas and Nike.
Nike’s price increases are relatively modest, Jaeger added, but “what worries me most is that the American consumer in general is not as strong as a couple of years ago.”
The trust of the American consumer collapsed even more in May, while the expectations of inflation at one year increased, according to consumer surveys of the University of Michigan on Friday.
Given the slightest demand, sportswear brands will have to carefully manage their inventories in retailers, Jaeger said, to avoid excess supply and be forced to offer discounts.
Puma, whose sales in the United States have decelerated themselves, can have less margin to raise the prices Adidas, said Krankowski of UBS.
Puma has said that its goal is to sell between 4 and 6 million pairs of its Speedcat footwear of 100 dollars inspired by formula 1 this year, but sales have been slower than expected, which raises the question of whether it should increase the price of the shoe.
“Puma does not have a great advantage as a pioneer because the other brands are taking more impulse,” Krankowski said.
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The most expensive brands are also adapting as Nike increases prices.
On, a company focused on running and whose adult shoes are sold to $ 130 or more, it plans to increase in July the prices of certain products in the United States, stating that this is part of its ambition to be the brand of global sportswear “more premium” and not a reaction to tariffs.
With Reuters information
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