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The French chief of the German maker of athletic products has radically transformed its culture and marketing strategy, but its stock is languishing.
When Robert Louis-Dreyfus became CEO of Adidas in 1993, the German manufacturer of sports shoes, apparel and equipment was being trounced by Nike, Reebok and other more agile rivals. Since the death of Horst Dassler -- founder Adi Dassler's son - in 1987, the company had been run by a succession of inept managers, including Bernard Tapie, the French businessman who was subsequently sent to prison for fixing a football match and other illegal activities.
Once one of the most powerful names in the sporting world, Adidas had degenerated into a muddle of illcoordinated brands that was fast losing market share. In 1992 the company lost $100 million.
Louis-Dreyfus moved in like a bulldozer, ousting most senior and many middle managers. He then recruited a group of feisty young executives from all over the world; today a majority of staffers in key departments like finance are nonGerman. Louis-Dreyfus also doubled the marketing budget, with the goal of sharpening the company's image. At the same time, he started buying majority stakes in the previously independent licensees that had traditionally distributed Adidas products, giving him control of how they were marketed. In 1993 the company made a $4.7 million profit. A year later the figure was $100 million.
A 53-year-old Parisian, Louis-Dreyfus earned an MBA from Harvard Business School before joining S.A. Louis-Dreyfus, his family's trading house. He subsequently worked as COO and CEO of medical marketing company IMS International and as CEO of Saatchi & Saatchi, the British advertising agency. At both companies he quickly established a reputation for relaxed but decisive management, just as he has at Adidas.
By 1995 Adidas was performing so strongly that Louis-Dreyfus was able to pull off an IPO. Then in 1997 he bought the French sporting-goods manufacturer Salomon for $1.4 billion. In the same year sales rose 23 percent, and net income reached $255 million. Management began making plans for a U.S. stock listing.
But that listing has been delayed because the company, now called AdidasSalomon, has hit a wall. Although net sales rose 48 percent last year (22 percent of which was accounted...