Adidas AG is a major German-based sports apparel manufacturer and parent company of the Adidas Group, which consists of the Reebok sportswear company, Taylor MadeAdidas golf company (including Ashworth), and Rockport. Besides sports footwear, the company also produces other products such as bags, shirts, watches, eyewear and other sports and clothing-related goods. The company is the largest sportswear manufacturer in Europe and the second biggest sportswear manufacturer in the world, after its U.S. rival Nike. Adidas was founded in 1948 by Adolf "Adi" Dassler, following the split of Gebrüder Dassler Schuhfabrik between him and his older brother, Rudolf. Rudolf would later establish Puma, which was the early rival of Adidas. Registered in 1949, Adidas is currently based in Herzogenaurach, Germany, along with Puma. The company's clothing and shoe designs typically feature three parallel bars, and the same motif is incorporated into Adidas’s current official logo. The "Three Stripes" was bought from the Finnish sport company Karhu Sports in the 1950s. The company revenue for 2009 was listed at €10.38 billion and the 2008 figure at €10.80 billion.

The company was founded in Germany in 1924 by the brothers Adolf and Rudolf Dassler. They first named the brand "Dassler Shoes" that started getting popular thanks to sponsored athletes in the Olympics. In 1948, though, Rudolf decides to start its own company named Puma. That's when, in 1949, Adolf comes up with the three stripes and changes his company's name to Adidas ('Adi' from his nickname and 'Das' from Dassler).

Page 1 of 76

Adidas was the leading brand among athletes community when, in 1978, Adolf Dassler passed and his wife Käthe, his son Horst, and his daughter Carry started running the business. That was a big transition that was completed in the 90's when Robert Louis-Dreyfus became Adidas CEO: Adidas started moving from being a manufacturing and sales based company to a marketing company.

The Brands under The Hood of Adidas Group

Adidas Group



Taylor made

Adidas has four different Logos

Page 2 of 76

Adolf "Adi" Dassler started to produce his own sports shoes in his mother's wash kitchen in Herzogenaurach, Bavaria, after his return from World War I. In 1924, his brother Rudolf "Rudi" Dassler joined the business which became Gebrüder Dassler Schuhfabrik (Dassler Brothers Shoe Factory) and prospered. The pair started the venture in their mother's laundry, but at the time, electricity supplies in the town were unreliable, and the brothers sometimes had to use pedal power from a stationary bicycle to run their equipment. By the 1936 Summer Olympics, Adi Dassler A pair of Adidas Samba football drove from Bavaria on one of the world's trainers.full of spikes and first motorways to the Olympic village with a suitcase persuaded U.S. sprinter Jesse Owens to use them, the first sponsorship for an African American. Following Owens's haul of four gold medals, his success cemented the good reputation of Dassler shoes among the world's most famous sportsmen. Letters from around the world landed on the brothers' desks, and the trainers of other national teams were all interested in their shoes. Business boomed and the Dasslers were selling 200,000 pairs of shoes each year before World War II. Late in World War II, the shoe factory shifted to production of the Panzerschreck anti-tank weapon.

The families fight that created adidas and puma

Adidas and Puma may be among the most recognized brands in the world, but neither might exist if not for a bitter rivalry between two brothers from a little-known village in Germany. In the 1920s, Adolf (Adi) Dassler, a softspoken sports fanatic who spent hours working on shoe designs in his workshop, and Rudolf Dassler, a gregarious salesman, started a small shoemaking business in the Bavarian enclave of Herzogenaurach, focusing primarily on hand-sewn athletic footwear. But as their business took off, the two brothers grew increasingly frustrated with each other. They disagreed on everything from politics, the future of the company and one another's choice in wives.

Page 3 of 76

Finally, in the mid-1940s Rudolf left in a huff and set up a rival shop across the river, while Adi remained in the initial plant. His company was renamed Adidas , and in 1948 Rudolf registered his new company, Puma. Both brothers joined the Nazi Party, but Rudolf was slightly closer to the party. During the war, a growing rift between the pair reached a breaking point after an Allied bomb attack in 1943 when Adi and his wife climbed into a bomb shelter that Rudolf and his family were already in: "The dirty bastards are back again," Adi said, apparently referring to the Allied war planes, but Rudolf was convinced his brother meant him and his family. After Rudolf was later picked up by American soldiers and accused of being a member of the Waffen SS, he was convinced that his brother had turned him in. The brothers split up in 1947, with
 

Rudi forming a new firm that he called Ruda – from Rudolf Dassler, later rebranded Puma, And Adi forming a company formally registered as Adidas AG (with lower case lettering) on 18 August 1949. The acronym All Day I Dream About Sport, although sometimes considered the origin of the Adidas name, was applied retroactively, which makes it a backronym. The name is actually a portmanteau formed from "Adi" (a nickname for Adolf) and "Das" (from "Dassler").

Bernard Tapie, a former French businessman who onced owned Adidas but has since relinquished his control over the company due to debt. After a period of trouble following the death of Adolf Dassler's son Horst Dassler in 1987, the company was bought in 1989 by French industrialist Bernard Tapie, for ₣1.6 billion (now €243.918 million), which Tapie borrowed. Tapie was at the time a famous specialist of rescuing bankrupt companies, an expertise on which he built his fortune. Tapie decided to move production offshore to Asia. He also hired Madonna for promotion. He sent, from Christchurch, New Zealand, a shoe sales representative to Germany and met Adolf Dassler's descendants (Amelia Randall Dassler and Bella Beck Dassler) and was sent back with a few items to promote the company there.

Page 4 of 76

In 1992, unable to pay the loan interest, Tapie mandated the Crédit Lyonnais bank to sell Adidas , and the bank subsequently converted the outstanding debt owed into equity of the enterprise, which was unusual as per the prevalent French banking practice. Apparently, the state-owned bank had tried to get Tapie out of dire financial straits as a personal favour to Tapie, reportedly because Tapie was Minister of Urban Affairs (ministre de la Ville) in the French government at the time. In February 1993, Crédit Lyonnais sold Adidas to Robert Louis-Dreyfus, a friend of Bernard Tapie for a much higher amount of money than what Tapie owed, 4.485 billion (€683.514 million) francs rather than 2.85 billion (€434.479 million). Tapie later sued the bank, because he felt "spoiled" by the indirect sale. Robert Louis-Dreyfus became the new CEO of the company. He was also the president of Olympique de Marseille, a team Tapie had owned until 1993, Tapie filed for personal bankruptcy in 1994. He was the object of several lawsuits, notably related to match fixing at the football club. During 1997, he served 6 months of an 18-month prison sentence in La Santé prison in Paris. In 2005, French courts awarded Tapie a €135 million compensation (about 886 million francs). An Adidas casual shoe, with the company's distinctive three parallel bars. In 2003, Adidas filed a lawsuit in a British court challenging Fitness World Trading's use of a two-stripe motif similar to Adidas 's three stripes. The court ruled that despite the simplicity of the mark, Fitness World’s use was infringing because the public could establish a link between that use and Adidas 's mark. In September 2004, top English fashion designer Stella McCartney launched a joint-venture line with Adidas , establishing a long-term partnership with the corporation. This line is a sports performance collection for women called "Adidas by Stella McCartney", and it has been critically acclaimed. Also in 2005, on 3 May, Adidas told the public that they sold their partner company Salomon Group for €485m to Amer Sports of Finland. In August 2005, Adidas declared its intention to buy British rival Reebok for $3.8 billion (US). This takeover was completed with partnership in January
Page 5 of 76

2006 and meant that the company will have business sales closer to those of Nike in North America. The acquisition of Reebok will also allow Adidas to compete with Nike worldwide as the number two athletic shoemaker in the world.

Logo History
Adidas - a name that stands for competence in all sectors of sport all over the world. Adidas was founded by Adolf (Adi) Dassler, who started producing shoes in the 1920s with the help of his brother Rudolf Dassler who later formed rival shoe company PUMA AG. Adi Dassler's aim was to provide every athlete with the best possible equipment. For this he followed three guiding principles: design the best shoe for the requirements of the sport, protect the athlete from injury, and make the product durable. Today, the Adidas brand product range extends from shoes, apparel and accessories for basketball, soccer, fitness and training to adventure, trail and golf. The company's clothing and shoe logo designs typically feature three parallel stripes, and this same motif is incorporated into Adidas 's current official logo. For years the only symbol associated with Adidas was the trefoil (flower) logo design. The 3 leaves symbolize the Olympic spirit, linked to the three continental plates as well as the heritage and history of the brand. The "Trefoil" was adopted as the corporate logo design in 1972. In 1996, it was decided that the Trefoil corporate identity would only be used on heritage products. Examples of products featuring the Trefoil logo design include the Stan Smith, Rod Laver, A-15 Warm-Up, and Classic T-Shirt. In January 1996, the Three-Stripe brand mark became the worldwide Adidas corporate logo. This logo represents performance and the future of the Adidas branding identity. It has become synonymous with Adidas and its dedication to producing high-quality athletic products to help athletes perform better. The 3-Stripes mark is without doubt the quintessential Adidas symbol. It was created by the Adidas company founder, Adi Dassler, and first used on footwear in 1949. Dassler created a symbol that could be immediately recognized when his footwear was used in athletic competition and associated with Adidas . He emphasized the association with the slogan “The Brand with the 3 Stripes”. The 3-Stripes were first used on apparel in 1967. The 3-Stripes now enjoy worldwide recognition as an Adidas symbol.

Page 6 of 76

In the late 60s Adidas expanded into the leisure and apparel sector, and this prompted Käthe and Adi Dassler to seek a new, additional identification mark for the Adidas brand. In August 1971, the Trefoil was born, out of more than 100 ideas. Inspired by the 3-Stripes, it is a geometric execution with a triple intersection, symbolizing the diversity of the Adidas brand. This symbol was first used on Adidas products in 1972, and later became the company’s corporate symbol. Today it plays the important role of representing the Adidas Originals collection.

In 1997, Adidas decided to introduce an integrated corporate design, choosing as the core element a new and yet familiar logo: the 3 bars. It was designed in 1990 by the then Creative Director Peter Moore, and initially used on the Equipment range of performance products. It is inspired by the 3-Stripes as they appear on footwear. The shape formed by the bars also represents a mountain, indicating the challenge to be faced and the goals to be achieved.

In August 1998, following the merger of Adidas and Salomon, the then named Adidas Salomon AG introduced a new corporate logo. The logo unites the values of the brands of the Group, incorporating the typical colours of the two previous groups: blue for Adidas , red for Salomon. The logo shows three shapes coming together to form a larger shape, namely a diamond. The space between the shapes forms another shape that of a person with arms rose in victory and celebration. This logo appeared on all corporate documents of the then named Adidas -Salomon AG, but not on products.

In July 2002, Adidas Salomon AG presented a revolutionary new business strategy for the Adidas brand, aimed at expanding its customer base and driving top-line growth. The new structure marked a fundamental shift from the traditional “Footwear” and “Apparel” structure, introducing a new threedivisional approach with the “Sport Performance”, “Sport Heritage” and “Sport Style” divisions.

Page 7 of 76

The products in the Adidas Sport Performance division are developed for the sports performance market but have design appeal, encouraging consumers to wear the products both on and off the court or playing field. The Adidas Sport Heritage division contains Adidas Originals products. Originals products seek to extend the Adidas brand’s unique and authentic heritage to the lifestyle market. Design and functionality are already strong aspects of the two existing Adidas divisions and are continued with an even stronger focus in the new Sport Style division.

Adidas Sport Style - the future in sportswear designed by Yohji Yamamoto is an exclusive collection, consisting of men’s and women’s footwear, apparel and accessories. It combines the mission of the sports brand with the vision of style to develop an unexpected and radical appeal. Yohji Yamamoto: “For me, this is an interesting and exciting new project on many levels. And, I always wanted my clothes to be accessible to… and desired by… a greater number of people, and I feel that it will be possible for me to achieve this through this new line.” In 2007, the Sport Heritage and Sport Style divisions merged into a single Sport Style division. The logos of the two divisions remain visible on the respective collections.

The corporate logo changed after the divestiture of Salomon in October 2005. The new logo of the Adidas Group was launched in April 2006. The Adidas Group logo is the umbrella under which all Group-owned brands stand. It brings Adidas back to its roots by using the familiar Adidas wordmark as a visual identity to the business community, strengthening image and impression.

Page 8 of 76

From a design perspective, the new logo is simple, clear, and confident and shows leadership. It will support future business growth and is flexible enough to anticipate any unforeseen changes. At the same time the Adidas brand received a new logo to incorporate the divisions Sport Performance and Sport Style.

Group Strategy

Their goal as a Group is to lead the sporting goods industry with brands built upon a passion for sports and a sporting lifestyle. Inspired by their heritage, they know that a profound understanding of the consumer and customer is essential to achieving this goal. To anticipate and respond to their needs, they continuously strive to create a culture of innovation, challenging ourselves to break with convention and embrace change. By harnessing this culture, they push the boundaries of products, services and processes to strengthen their competitiveness and maximize the Group’s operational and financial performance. This, in turn, will drive long-term value creation for their shareholders.

Page 9 of 76

Financial Calendar 2010

2009 Full Year Results Analyst and press conferences in Herzogenaurach, Germany Press release, conference call and webcast First Quarter 2010 Results Press release, conference call and webcast Annual General Meeting Fürth (Bavaria), Germany Webcast Dividend paid (Subject to Annual General Meeting approval) First Half 2010 Results Press release, conference call and webcast Nine Months 2010 Results Press release, conference call and webcast

March 3, 2010

May 4, 2010

May 6, 2010

May 7, 2010

August 4, 2010

November 4, 2010

Page 10 of 76

Financial Highlights

2009 Operating Highlights (€ in millions) Net sales EBITDA Operating profit Net income attributable to shareholders Key Ratios (%) Gross margin Operating expenses as a percentage of net sales Operating margin Effective tax rate Net income attributable to shareholders as a percentage of net sales Operating working capital as a percentage of net sales1) Equity ratio Financial leverage Return on equity Balance Sheet and Cash Flow Data (€ in millions) Total assets Inventories Receivables and other current assets Working capital Net borrowings Shareholders’ equity Capital expenditure Net cash from operating activities Per Share of Common Stock (€) Basic earnings Diluted earnings Operating cash flow Dividend 10,381 780 508 245

2008 10,799 1,280 1,070 642

Change (3.9%) (39.1%) (52.6%) (61.8%)

45.4% 42.3% 4.9% 31.5% 2.4%

48.7% 40.5% 9.9% 28.8% 5.9%

(3.3pp) 1.7pp (5.0pp) 2.7pp (3.6pp)

24.3% 42.5% 24.3% 6.5%



35.5% 7.0pp 64.6% (40.3pp) 18.9% (12.4pp)

8,875 1,471 2,038 1,649 917 3,771 240 1,198

9,533 1,995 2,523 1,290 2,189 3,386 380 497

(6.9%) (26.3%) (19.2%) 27.8% (58.1%) 11.3% (36.8%) 140.9%

1.25 1.22 6.11 0.352)

3.25 3.07 2.52 0.50

(61.5%) (60.2%) 142.6% (30.0%)

Page 11 of 76

Share price at year-end Other (at year-end) Number of employees Number of shares outstanding Average number of shares




39,596 38,982 209,216,186 193,515,512 196,220,166 197,562,3463)

1.6% 8.1% (0.7%)

Retail at a glance € in millions
2009 2008 Change Net sales 1,906 1,738 10% Gross profit 1,116 1,069 4% Gross margin 58.6% 61.5% (2.9pp) Segmental operating profit 267 326 (18%) Segmental operating margin 14.0% 18.8% (4.8pp)

Net sales by product category € in millions
Footwear 2,978 4,733 4,751 4,919 4,642 Apparel 2,798 4,105 4,426 4,775 4,663 Hardware 860 1,246 1,121 1,105 1,076 Total 6,636 10,084 10,299 10,799 10,381

2005 2006 2007 2008 2009

Page 12 of 76

2009 net sales by product category

Major locations

EUROPE Adidas Group Headquarters, Herzogenaurach, Germany Adidas International Finance, Amsterdam, Netherlands Adidas International Trading, Amsterdam, Netherlands Adidas Group Russia, Moscow, Russia NORTH AMERICA Adidas North America, Portland/Oregon, USA Reebok International Headquarters, Canton/Massachusetts, USA The Rockport Company Headquarters, Canton/Massachusetts, USA Reebok–CCM Hockey Headquarters, Montreal/Quebec, Canada TaylorMadeAdidas Golf Headquarters, Carlsbad/California, USA Sports Licensed Division Headquarters, Canton/Massachusetts, USA ASIA Adidas Group Asia, Hong Kong, China LATIN AMERICA Adidas Group Latin America, Panama City, Panama

01 02 03 04

05 06 07 08 09 10



Established as a brand in 1948 in Germany, Adidas runs 22 stores in the US, and 398 stores in the rest of the world.

Page 13 of 76

Adidas outsourcing strategy
If the success of Nike brand, marketing, logistics, combined with the embodiment, then the Adidas brand strategy is not very good in the case of winning margin since the success of cost savings in the supply chain that reflects most vividly. Adidas and Nike are not the same logistics strategy. Nike after long-term development, has established a good logistics infrastructure, using its own logistics system. The Adidas through cost accounting, chose outsourcing their logistics operations, which the logistics system, its not perfect, no doubt, reduce operating costs. Back in 1996, Adidas has decided to apparel distribution business in the United States to the UPS global logistics outsourcing company. A year later, another with CALIBER logistics companies, outsourcing distribution of sports shoes. Adidas has always insisted the international logistics companies to cooperate with these companies so that Adidas had a good benefit, not only significant savings in cost and improved logistics service quality, rapid delivery of its products to customers. Although the distribution link in outsourced logistics company, logistics management, production processes on the same can not be ignored. In the new century, sports goods nike air tairwind 2010 companies increasingly sensitive to cost. As the supply is very large, small changes in unit costs will lead to significant changes in the total cost. Especially with the fierce market competition, sports brand, style replacement soon, sports apparel and footwear sales life cycle has been shortened to 3 months. Faced with this situation, the production and supply chain is particularly important. nike air max tn Adidas has maintained a research and development and foundry interaction, direct that R & D foundry business process, saving time between R & D and production distance. R & D in logistics outsourcing and OEM basis of interaction, Adidas protect its supply chain strategy for winning. Outsourcing of logistics for the expansion of markets,nike air max 90 especially in a high demand market coverage is very important for the industry. The rapid development of the brand in the global movement for nearly 20 years, Adidas has also accelerated its supply chain, the pace of outsourcing of logistics resource integration. After the acquisition of Reebok in the United States, this outsourcing on the global supply chain logistics integration into the global market tool for Adidas. We can see that
Page 14 of 76

Adidas logistics outsourcing strategy to expand its market played a key role. Footwear should be changed regularly. nike air force 1 one Because the "maturity" of the shoes may not provide enough support or shock absorption. When your shoes too much inward or outward tilt, the instructions to the replacement of their time. If the soles wear, and also the renewal shoes. Running shoes should be about 300 to 400 miles for each one. Shoes were worn in the bottom sandwich on the cause of chronic foot injury, in addition, sole sandwich need recovery time, if you run every day, or a walking enthusiast, you'd better have two pairs of shoes rotations give them some rest time.

Adidas announce strategic outsourcing
When Brazilian striker Luís Fabiano commented: "It’s supernatural! All of a sudden it changes trajectory on you!” he was speaking of the Adidas Jubulani football. He might, however, have been speaking of the HR Strategy of the Adidas Group, who have just announced that they are reversing their earlier strategy of outsourcing recruitment, and have decided to bring the activity back in-house and in doing so save up to almost £5m in headhunter and advertising costs. Adidas moves recruitment in-house to save €6m a year Isn’t it fascinating and ironic that the alleged benefits of the majority of outsourcing initiatives are cost reduction and improved service delivery but, almost without exception, whenever an organisation elects to “insource” an activity it is for exactly the same reason. A quick browse through one of the most popular HR textbooks will reveal comments such as: Outsourcing appears to encourage the measurement of the value of HR and it is suggested that this comes about through the need for service-level agreements and key performance indicators with a greater focus on customer

Page 15 of 76

satisfaction. Outsourcing allows the internal HR function to concentrate on driving the direction of HR rather than carry out more mundane tasks. Certainly in the case of Adidas, reducing costs and improving processes are specifically quoted as reasons for this major decision. Where cost is uppermost, it’s not always HR that is calling the tune. As the sadly-departed Marcia Roberts (former Chief Executive of the Recruitment and Employment Confederation) warned.

Corporate responsibility Strategy 2010
The adidas Group's social and environmental strategy 2008-2010 has been built on the achievements and experiences from previous years. It responds to changes in our overall business development and to feedback that we have captured from stakeholders. Our strategy defines primary areas which are core to our business and where we dedicate our attention, efforts and resources. These areas are:  Embedding environmental sustainability across our business - this recognises the urgent need to address questions of resource use, environmental degradation and climate change, 'the' business drivers for the 21st Century  Effectively managing business risks and social compliance in our supply chain - the supply chain is expanding, and becoming more complex with multiple relationships and stretched lines of communication and control  Extending our engagement internally and externally - partnering with others to embed new thinking and better ways of working within our business and along our supply chain. The issues are so large and complex that we cannot solve them alone  Creating the best and most productive workplace in the industry by becoming a champion in talent and succession management, a worldclass recruiter and a Top 10 employer in every key market in which we operate. More detailed targets for each of these core areas were defined for 2008 and published in our 2007 Social and Environmental Report. In the present report you can read about our progress against these targets.

Page 16 of 76

Key focus areas

Core area Environmental sustainability

Topic Product Production Own sites Direct supply chain Indirect supply chain Business entities Global economic crisis Internal External

Goal 'The right choice' 'Partner for change' 'Lead by example' 'Drive self-governance' 'Control and manage risks' 'Drive accountability' 'Transparent management'

Supply chain

Stakeholder engagement

'Drive integration and embedded thinking' 'Partner for change, transparency and accountability' 'To be a champion in succession planning' 'To be a world-class recruiter' 'To be a Top 10 employer of choice in every key market in which we operate.'


Succession planning Recruitment Employer of choice

Page 17 of 76

Ten-year overview

2009 Income Statement Data (€ in millions) Net sales Gross profit Royalty and commission income Other operating income Other operating expenses EBITDA Operating profit Financial result Income before taxes Income taxes Minority interests Net income attributable to shareholders Income Statement Ratios Gross margin Operating margin Interest coverage Effective tax rate Net income attributable to shareholders as a percentage of net sales Sales by Brand (€ in millions) Adidas










10,38 1 4,712 86

10,79 9 5,256 89

10,29 9 4,882 102

10,08 4 4,495 90

6,636 3,197 47

5,860 2,813 42

6,267 2,814 42

6,523 2,819 46

6,112 2,601 42

5,835 2,528 43





















780 508 (150) 358 113 0 245

1,280 1,070 (166) 904 260 (2) 642

1,165 949 (135) 815 260 (4) 551

1,078 881 (158) 723 227 (13) 483

806 707 (52) 655 221 (8) 383

716 584 (59) 526 193 (7) 314

652 490 (49) 438 167 (11) 260

622 477 (87) 390 148 (14) 229

620 475 (102) 376 147 (21) 208

578 437 (94) 347 140 (25) 182

45.4 % 4.9% 3.9 31.5 % 2.4%

48.7 % 9.9% 7.4 28.8 % 5.9%

47.4 % 9.2% 6.8 31.8 % 5.4%

44.6 % 8.7% 5.9 31.4 % 4.8%

48.2 % 10.7 % 18.4 33.7 % 5.8%

48.0 % 10.0 % 10.2 36.7 % 5.4%

44.9 % 7.8% 8.4 38.0 % 4.2%

43.2 % 7.3% 6.4 37.9 % 3.5%

42.6 % 7.8% 4.9 39.0 % 3.4%

43.3 % 7.5% 4.6 40.3 % 3.1%











Page 18 of 76

Reebok Taylor MadeAdidas Golf Rockport Reebok-CCM Hockey Balance Sheet Data (€ in millions) Total assets Inventories Receivables and other current assets Working capital Net borrowings Shareholders’ equity Balance Sheet Ratios Net borrowings/EB ITDA Financial leverage Equity ratio Equity-tofixed-assets ratio Asset coverage I Asset coverage II Fixed asset intensity of investment Current asset intensity of investment Liquidity I Liquidity II Liquidity III Working capital turnover Return on equity Return on capital employed Data Per Share

1,603 831 232 177

1,717 812 243 188

1,831 804 291 210

1,979 856 293 202

— 709 — —

— 633 — —

— 637 — —

— 707 — —

— 545 — —

— 441 — —

8,875 1,471 2,038

9,533 1,995 2,523

8,325 1,629 2,048

8,379 1,607 1,913

5,750 1,230 1,551

4,434 1,155 1,425

4,188 1,164 1,335

4,261 1,190 1,560

4,183 1,273 1,520

4,018 1,294 1,387

1,649 917 3,771

1,290 2,189 3,386

1,522 1,766 3,023

1,733 2,231 2,828

2,644 (551) 2,684

1,336 665 1,544

1,433 1,018 1,285

1,445 1,498 1,081

1,485 1,679 1,015

1,417 1,791 815











24.3 % 42.5 % 85.9 % 137.4 % 102.9 % 49.5 % 50.5 % 30.0 % 80.4 % 132.2 % 6.3

64.6 % 35.5 % 73.6 % 127.7 % 89.1 % 48.2 % 51.8 % 10.5 % 55.1 % 109.8 % 8.4

58.4 % 36.3 % 72.2 % 136.1 % 98.0 % 50.3 % 49.7 % 14.5 % 70.3 % 132.6 % 6.8

78.9 % 33.8 % 63.5 % 138.7 % 102.0 % 53.2 % 46.8 % 15.8 % 80.4 % 153.7 % 5.8

(20.5 %) 46.7 % 194.0 % 284.1 % 150.4 % 24.1 % 75.9 % 92.0 % 148.0 % 219.4 % 2.6

43.1 % 34.8 % 110.4 % 194.1 % 106.3 % 31.6 % 68.4 % 26.8 % 88.4 % 156.4 % 4.4

79.2 % 30.7 % 91.1 % 197.6 % 108.3 % 33.7 % 66.3 % 20.8 % 100.8 % 187.4 % 4.4

138.5 % 25.4 % 75.4 % 196.9 % 107.6 % 33.7 % 66.3 % 5.5% 99.1 % 185.3 % 4.5

165.5 % 24.3 % 77.8 % 209.3 % 105.9 % 31.2 % 68.8 % 6.1% 96.0 % 187.4 % 4.1

219.6 % 20.3 % 66.2 % 207.7 % 101.3 % 30.7 % 69.3 % 7.7% 90.4 % 185.0 % 4.1

6.5% 11.3 %

18.9 % 19.8 %

18.2 % 20.2 %

17.1 % 17.6 %

14.3 % 49.3 %

20.4 % 27.5 %

20.2 % 22.1 %

21.1 % 16.8 %

20.5 % 16.7 %

22.3 % 17.0 %

Page 19 of 76

Share price at year-end (in €) Basic earnings (in €) Diluted earnings (in €) Price/earnings ratio at yearend Market capitalization at year-end (€ in millions) Operating cash flow (in €) Dividend (in €) Dividend payout ratio (in %) Number of outstanding shares at year-end (in thousands) Employees Number of employees at 2) year-end Personnel expenses (€ in millions)

37.77 1.25 1.22 31.0

27.14 3.25 3.07 8.8

51.26 2.71 2.57 19.9

37.73 2.37 2.25 16.8

40.00 2.05 1.93 20.7

29.69 1.72 1.64 18.1

22.58 1.43 1.43 15.8

20.58 1.26 1.26 16.3

21.08 1.15 1.15 18.3

16.50 1.00 1.00 16.5



10,43 8



















0.50 15.1

0.50 18.0

0.42 17.7

0.33 17.2

0.33 18.9

0.25 17.5

0.25 19.8

0.23 20.0

0.23 22.9


209,2 16

193,5 16

203,6 29

203,5 37

203,0 47

183,4 36

181,8 16

181,6 92

181,3 96

181,3 96

39,59 6 1,352

38,98 2 1,283

31,34 4 1,186

26,37 6 1,087

15,93 5 706

14,25 4 637

15,68 6 709

14,71 6 758

13,94 1 695

13,36 2 630

Major Promotion Partnerships 2010
The Adidas Group sells products in virtually every country around the world. As at December 31, 2009, the Group had 177 subsidiaries worldwide with our headquarters located in Herzogenaurach, Germany; Our Group has also assembled an unparalleled portfolio of promotion partnerships around the world, including sports associations, events, teams and individual athletes. Our Group’s most important locations and upcoming sporting events are highlighted on the world map.

Page 20 of 76

Orange Africa Cup of Nations 2010, Angola January 10 – 31, 2010 Adidas Official Match Ball Supplier EHF Handball EURO 2010, Austria January 19 – 31, 2010 Adidas Official Partner of European Handball Federation NFL Super Bowl, Miami/Florida, USA February 7, 2010 Reebok Official Outfitter of National Football League NBA All-Star Game, Dallas/Texas, USA February 14, 2010 Adidas Official Outfitter of National Basketball Association IAAF Indoor World Championships, Doha, Qatar March 12 – 14, 2010 Adidas Official Partner Boston Marathon, Boston/Massachusetts, USA April 19, 2010 Adidas Official Apparel and Footwear Outfitter Flora London Marathon, London, UK April 25, 2010 Adidas Official Sponsor UEFA Europa League Final, Hamburg, Germany May 12, 2010 Adidas Official Match Ball Supplier ICC World Twenty20, West Indies April 30 – May 16, 2010 Adidas Official Supplier of Australia and England cricket teams UEFA Champions League Final, Madrid, Spain May 22, 2010 Adidas Official Ball Supplier for UEFA Champions League French Open, Paris, France May 23 – June 6, 2010 Adidas Official Partner of Roland Garros 2010 FIFA World Cup™, South Africa June 11 – July 11, 2010 Adidas Official Partner of Fédération Internationale de Football Association, Official Match Ball Supplier of FIFA MLB All-Star Game, Anaheim/California, USA July 13, 2010














Page 21 of 76

Reebok Official Licensee of Major League Baseball fan and lifestyle apparel and Official Authentic Collection Footwear Supplier UEFA Super Cup, Monaco August 27, 2010 Adidas Official Match Ball Supplier 2010 FIBA World Championship, Turkey August 28 – September 12, 2010 Adidas Official Supplier real,– Berlin Marathon, Berlin, Germany September 26, 2010 Adidas Official Partner P O N

Apparel Product of Adidas


Page 22 of 76



Page 23 of 76

Reebok was founded in 1895 in Bolton, England by J.W. Foster. In its first incarnation, the company was called simply J.W. Foster and Sons. Foster’s goal was simple: make a running shoe that enabled athletes to run faster. His solution was to add spikes to the bottom of the sole at a time when very few shoemakers were employing this technology.

Foster’s clientele was elite. He designed shoes for top athletes around the world. In fact, several athletes at the 1924 Olympic Summer Games were wearing shoes designed by J.W. Foster and Sons. J.W. Foster and Sons did not become Reebok until 1958 when Joe and Jeff Foster (J.W.’s grandsons) rechristened the company. Reebok is the Afrikaans spelling of reebok, which is a kind of African antelope. The spelling was somewhat of an accident. Joe and Jeff found the word in a South African dictionary that Joe had won as a child. The shoes were not available to the American market until 1979 when the American Paul Fireman ran across Reebok shoes at an international trade show. When Reeboks were first released in the United States, they cost 60 dollars and were the most expensive running shoes being sold at that time. Reebok really took off in the 1980’s when women’s athletic footwea r hit the market. While companies like Nike still dominated Reebok when it came to running shoes, Reebok was the lion among the competitors when it came to aerobics. The Reebok Freestyle was released in 1982 (high-top version in 1985), and it quickly became a cultural sensation. The male version of the Freestyle, dubbed the Ex-O-Fit, followed soon after. With bright colors and Velcro straps, the Freestyle and Ex-O-Fit helped to define 80’s fashion. During the 1980’s Reebok’s popularity exploded into international markets, with the brand ultimately becoming available in over 170 countries. In the last
Page 24 of 76

decade, Reebok has made partnerships with the National Football League, the National Basketball Association and the National Hockey League. Spokespersons for the brand included the likes of Jay-Z, Lucy Liu and Allen Iverson. In January 2006, Reebok was bought out by adidas and became a subsidiary of the company. Adidas, which was formally one of the biggest competitors of Reebok, paid $3.8 billion. Later that year in November the National Basketball Association and Women’s National Basketball Association decided to replace Reebok branding on their merchandise with adidas because adidas is better known outside of US and UK markets than Reebok.

Reebok runs their business with six individual logos

Page 25 of 76

Reebok Strategy and Focus Areas

In 2009, the Reebok brand has continued to execute its strategy, positioning itself as a premium sports and lifestyle brand focused on fitness and training. Based on its roots and heritage in fitness/training, consumer insights and positioning within the adidas Group, Reebok developed a clear roadmap for its key businesses going forward: Own Women’s Fitness, Challenge in Men’s Training/Sport and Revive Classics. Central to Reebok’s brand heritage is the courage to challenge convention. Unlike many other brands, Reebok is committed to make fitness fun again – challenging men and women to fulfil their potential in sport and in life by providing them with the opportunity, the products and the inspiration to have fun staying in shape.

Women’s fitness

Reebok is on a mission to make fitness fun again for women. The brand’s commitment to women’s fitness is long-standing. It introduced Step Reebok in
Page 26 of 76

1989 and was at the forefront of the aerobics movement of the 1980s. This heritage and credibility has connected women to Reebok in a powerful way, and serves as the cornerstone for the brand’s business expansion. In 2009, the brand has accelerated its women’s programmes, introducing new partnerships and products and once again reaffirming its support of women’s health and fitness – whether it’s out of the gym, in the gym or for a cause.

ReeTone: Women are busy and don’t always find the time to fit in their daily workout. Based on this relevant consumer need, in 2009, Reebok launched the EasyTone™ footwear collection that allows consumers to “take the gym with them”. EasyTone™ is based on Reebok’s proprietary “moving air” technology. It involves two balance pods under the heel and forefoot of the shoes that create natural instability with every step, forcing the muscles to adapt and develop tone. Building on the huge success of E asyTone™ in 2009, Reebok will launch an integrated marketing campaign around the world in 2010 under the motto of “ReeTone”. Reebok is also expanding its footwear offering into the running and training category, launching RunTone™ and TrainTone™ in 2010. ReeGym: Through Reebok’s partnership with Cirque du Soleil, the brand will continue to develop new inspiring workout experiences and product collections to strengthen its position in the gym. The overriding aim of this collaboration is not just to create physically demanding workout routines, but to create exercises that are fun, unique and enjoyable. In spring 2009, Reebok and Cirque du Soleil launched JUKARI Fit to Fly™, taking inspiration from the theatrical and physically demanding artistry of Cirque du Soleil. Building on this, in 2010 Reebok and Cirque du Soleil are launching JUKARI Fit to Flex™ – a workout that enhances flexibility and muscle tone with the help of a specifically designed JUKARI band. The JUKARI training experience is accompanied by a fully integrated women’s fitness range, the Reebok Cirque du Soleil collection, which combines the performance demands of the workout with the creativity of Cirque du Soleil. In addition, Reebok launched the On The Move collection of apparel and footwear, created for the needs of a woman’s busy lifestyle. The collection is versatile and able to be mixed and matched in or out of the gym.

Page 27 of 76

Challenge in men’s sport

Reebok is also a well-recognised men’s sports and training brand, a result of its innovative products and its long-standing partnerships with several of the world’s top athletes, professional leagues and teams. Given Reebok’s close collaboration with athletes, the brand has a clear understanding of athletes’ training needs. The primary focus is on creating versatile products that help athletes prepare for their sport irrespective of the discipline. For 2010, the brand is accelerating its men’s training efforts, introducing two key initiatives.

ReeZig: In spring 2010, Reebok will introduce ZigTech™, a completely new training shoe for endurance sports like running and agility sports. In product testing, a host of enthusiastic athletes and consumers confirm that ZigTech™ is not only visually striking, but more importantly it addresses an unmet need of fitness runners and athletes. This need is to get more out of their workout and reduce wear and tear – thus allowing them to enhance their lifetime as an athlete. By maximising energy transfer through its zigzag geometry back to the actual running stride, this shoe allows the wearer to train longer, faster and healthier. This is achieved as the unique energy and cushioning system reduces stress on muscles by up to 20%, therefore reducing wear and tear on the runner’s body. The introduction of ZigTech™ will be supported by an integrated global marketing campaign “ReeZig” – featuring key athletes from Reebok’s roster – with major launches planned to coincide with global event milestones such as the Super Bowl. ReeTrain: In 2010, Reebok will introduce a complete range of strength training products for men based on its muscle toning platform of “moving air”. Air-filled pods under the heel and forefoot of the shoes create a natural instability with every step, forcing the muscles to adapt and work harder. This allows the consumer to “get more out of their workout”. The offering includes EasyTone™ for walking and casual wear, TrainTone™ for training exercises and the gym, RunTone™ for running and JumpTone™, helping to strengthen key leg muscles and thus allowing athletes to improve their vertical leap.

Page 28 of 76

Reebok-CCM Hockey Strategy

Reebok-CCM Hockey is one of the world’s largest designers, manufacturers and marketers of hockey equipment and related apparel under two of the most recognised hockey brand names: Reebok Hockey and CCM Hockey. Reebok-CCM Hockey equips more professional hockey players than any other company, including NHL superstars such as Sidney Crosby and Alexander Ovechkin. Reebok-CCM Hockey is also the official outfitter of highprofile leagues such as the National Hockey League as well as several NCAA and national teams. Reebok-CCM Hockey’s strategy is to increase market share by leveraging its multi-brand approach to speak to different consumer groups, supported by its dedication to innovate for the leading athletes in the sport.

Focus on high-end performance

Reebok-CCM Hockey has a dual brand portfolio consisting of Reebok Hockey and CCM Hockey. Reebok Hockey is a global brand that celebrates individuality in sport and in life. Its products are designed with emphasis on innovative visible technologies that speak to a more expressive, imageconscious consumer. CCM Hockey is hockey’s most authentic brand, being in existence since 1899. CCM Hockey embraces the physical side of the game and is all about guts and glory. The brand speaks to a consumer seeking performance and quality. Reebok-CCM Hockey’s primary focus is to lead in the high-end performance segment of the hockey market. Continued success in the hockey market will be driven through a concerted focus on product innovation, supported by professional player validation achieved by having the best athletes in the world play with Reebok-CCM Hockey products. Differentiated marketing and brand campaigns are targeted towards the intended consumer segment, for example players or fans. In-arena and
Page 29 of 76

partnership-based marketing programmes, consumer campaigns and webbased initiatives are designed to create brand exposure, creating demand for Reebok-CCM Hockey products.

Product innovation matches brand positioning
The key priority for Reebok-CCM Hockey’s innovation team is to design, develop and industrialise products that are targeted to be visibly different and demonstrably better than that of the competition, with a dedication to providing elite athletes with high-performance products. With its emphasis on continued product innovation, products incorporate proprietary patented technological advances under both brands within the Reebok-CCM Hockey portfolio. Reebok Hockey’s Pump Skates, O-Sticks and the Edge Uniform exemplify the brand’s breakthrough technologies. CCM Hockey’s product innovation story is led by its U+™ Skate, the only truly customisable skate in the market, and the U+™ Stick, the lightest performance stick in the world.

Professional player validation
Reebok-CCM Hockey recognises that success with the consumer is heavily influenced by exposure generated at the Pro League level. Product usage by the best players in the game validates Reebok-CCM Hockey’s product performance credentials, and both brands are highly visible among professional hockey leagues worldwide. The strongest league partnerships: Reebok-CCM Hockey has the strongest league partnerships within the industry. It is the exclusive licensee of jerseys for the National Hockey League (NHL), the American Hockey League (AHL), the ECHL, the Canadian Hockey League (CHL) and many of the European National (5) and Elite League (33) teams. 99% of all NHL players wear at least one piece of Reebok or CCM Hockey equipment. Reebok-CCM Hockey is also the official equipment supplier of the AHL, the CHL and the ECHL.
Page 30 of 76

Impressive roster of Pro Player endorsees: Reebok-CCM Hockey has formed endorsement partnerships with many of the best athletes in the world. With manufacturing capabilities close to the world’s major leagues, the two brands can respond rapidly with customised solutions. This provides a strong competitive advantage in attracting key pro athletes. The Reebok Hockey brand is currently endorsed by NHL players such as Sidney Crosby, Pavel Datsyuk, Roberto Luongo and Marc-Andre Fleury. CCM Hockey’s roster of player endorsees includes Alexander Ovechkin, Joe Thornton and Vincent Lecavalier. In 2009, Reebok-CCM Hockey made an unprecedented move in the hockey world by signing the three top overall NHL Draft picks – John Tavares (CCM Hockey), Matt Duchene (Reebok Hockey) and Victor Hedman (Reebok Hockey).

Increase profitability through supply chain efficiencies

Another strategic priority for Reebok-CCM Hockey is to continue to pursue a movement away from own manufacturing to sourcing goods. However, the segment will maintain manufacturing activities in areas where it is a distinct competitive advantage to do so, such as is the case for performance products destined for pro level athletes.

Product education programmes to support retail partners

Reebok-CCM Hockey provides its strategic retail partners with product education programmes, in-store merchandising programmes and on-the-floor staff support. Reebok-CCM Hockey develops retail segmentation
Page 31 of 76

programmes that help create differentiated packages for its key accounts. Core distribution channels include hockey specialty shops, sporting goods retailers and in-arena concessions.

Pricing strategy mirrors product positioning
Reebok-CCM Hockey’s pricing strategy is consistent with its positioning as a high-performance company. Through a commitment to product innovation, Reebok-CCM Hockey’s pricing strategy is to dominate the market in the premium price segments and to be a strong competitor within the mid-price segment of the market.

Key strategic categories to drive growth

Reebok-CCM Hockey intends to accomplish growth through a continuous stream of product launches in its three key category priorities: skates, sticks and apparel. Skates: The focus in the skate category is to drive market share increases through the creation of products that continue to address critical aspects such as fit, weight and durability. For example, in 2010, a new line of Reebok Hockey branded skates, 11K Pump, is being launched, featuring an advanced fit element. This new skate line was also designed with a clear focus to incorporate lightweight and durable materials. In 2011, CCM Hockey plans to launch the next generation of its U+™ platform which features a fully thermo formable skate. In addition to the aforementioned launches, projects within the advanced product development group will continue to drive innovation in subsequent years. Sticks: To drive future growth in the sticks category, Reebok-CCM Hockey focuses on developing new technologies that incorporate enhanced power,
Page 32 of 76

feel, flexibility and weight. The Reebok 8.0.8 “O-Stick” features proprietary, highly visible O-Port technology, providing players with a more powerful and accurate shot. The CCM U+™ CL stick is the lightest performance stick in the marketplace and provides players with an optimised balance and feel. Apparel: Reebok-CCM Hockey will strive to further leverage its league partnerships and exclusive uniform status to drive growth. The Reebok Edge NHL Jersey features a four-way Stretch Mesh to provide players with maximum ventilation and range of motion. In addition to official uniforms, Reebok-CCM Hockey also has opportunities to grow due to its status as the official NHL locker room performance apparel supplier, and its exclusive rights related to the NHL Players’ Association (NHLPA) for name and numbered apparel and headwear. NHL locker room performance apparel relates to the apparel that pro athletes wear under their jerseys during a game, or to work out and train in the gym. A key product initiative in this area is Reebok Speedwick apparel. Designed to feel like cotton, fabrics used in this apparel are breathable, utilising Play Dry® technology to manage moisture and antimicrobial yarns to permanently inhibit the growth of bacteria. The introduction of these products is supported by an integrated global marketing campaign, “ReeTrain”. Key Reebok athletes such as Lewis Hamilton will again bear testimony to Reebok’s training products. On the apparel side, Reebok will launch a versatile collection of apparel called “Training Day”. Designed for the athletes’ training needs, fusing sport and style influences, this collection is able to be worn on and off the pitch. In addition, Reebok’s global men’s focus on training and running will be complemented by a select set of regional category priorities, for example American football, baseball and lacrosse in North America, or cricket in India. To drive future growth in these categories, Reebok continues to develop a product and innovation strategy concentrating on fit. In 2010, Reebok is expanding its portfolio of fit technologies with the introduction of U-Form. Adapted from a Reebok-CCM Hockey skate technology, U-Form is a heatactivated customised fit system. The athlete heats the shoes (either in-store or at home) at around 200ºF/90ºC for 3.5 minutes. He then laces the shoe
Page 33 of 76

tight and relaxes for about 8 minutes as the shoe forms to the exact shape of his foot. By contouring the shoe to the shape of the foot, potential skin irritation is eliminated and, because of its proper fit, the performance of the underfoot technologies are optimised. U-Form will be available in select American football, basketball, baseball and running shoes starting in May 2010.

Revive Classics

Although Reebok Classics was born from sport in the early 80s, today it represents the intersection where sport meets style, offering lifestyle footwear, apparel and accessories. In rebuilding the Classics business, a key tenet of the strategy is to control distribution by segmenting the product offering available for retailers, as well as keeping a tight rein on supply. In 2009, Reebok has continued to tightly manage its directional sport and generalist retail channels particularly in the United States and in Europe, with the primary aim to clean up old inventory and reduce the brand’s exposure to low price points. In addition, Reebok has launched new product initiatives in a controlled and disciplined way. At the same time, the brand has begun to strengthen its position in the select and trend channels with limited editions and special projects. An example of this is “Pump20” which was kicked off in November 2009 to celebrate the 20th anniversary of The Pump™. Through a partnership with 20 select retailers around the world, custom collaborations of The Pump™ were developed and exclusively launched in select stores. To leverage its iconic sports heritage, Reebok revives its Classics business by focusing its product range with two priority pillars that define the Classics product architecture: Always Classic and New Classic. Always Classic: Always Classic products harken back to the brand’s roots and merge iconic models from the 80s and 90s with new midsole/outsole technologies. New Classic: The New Classic segment represents the modern interpretation of Reebok’s roots. Inspired by the past, New Classic collections merge sport and style to re-energise the category. The launch of the Women’s Fly Generation collection represents this new direction with products like the Top Down and Courtee Mid. The marketing communication will use the brand platform of “Ree” as the
Page 34 of 76

guiding principle for Classics – with the new messaging of “ReeClassic”. The main message behind “ReeClassic” will be the idea of reinterpreting Reebok’s roots and will be showcased primarily through retail and digital.

Appareal Product of Reebok



Page 35 of 76


Page 36 of 76

Rockport has a globally relevant brand and product offering with regional distribution in the United States, the Americas, Europe, the Middle East and Asia. Its key global priorities include: strengthen its position in the USA, establish a regional organisation to build a foundation for the brand and drive growth in Europe, and exploit growth opportunities in Asia, particularly in China, India and Korea.

Rockport Strategy

Rockport is a US-based manufacturer of leather footwear. Founded in 1971, the brand has a long history of selling walking and comfort leather shoes for men and women. Rockport’s mission is to become a leading leather footwear brand in the world through the innovative combination of contemporary style and engineered comfort. The leather footwear market is a large, highly attractive market where few players have been able to achieve significant market share. Rockport’s brand position in select markets and its heritage provide a strong foundation for growth.

Leather footwear market offers significant opportunity
The leather footwear industry is highly attractive in terms of size, growth and profit potential. The market is estimated at over US$ 70 billion. It is currently a highly fragmented global market. Rockport has one of the strongest brand heritages in the leather footwear industry and has strong brand recognition, particularly in its home market, the United States. Rockport has the opportunity to be one of the winners in this industry by achieving sustainable, profitable growth in the years to come.

Page 37 of 76

Global brand positioning relevant to Rockport’s target consumer

Rockport’s brand positioning is “Comfortably stylish, contemporary, and always innovative”. This positioning builds on Rockport’s existing brand equity in comfort and technological innovation while also focusing on developing a stylish and contemporary brand through Rockport’s world-class, international design resources, broad category and consumer end use coverage, and the utilisation of three product range fashion expressions to appeal to a large consumer base. The combination of these brand elements attracts Rockport’s globally relevant main target consumer, the metropolitan professional. The brand is currently focused almost exclusively on the footwear category.

Focus on consistent execution of brand direction
Rockport’s brand vision is to enable people to do more, be more, and live more. This vision is achieved through the brand’s shoemaking philosophy, “Walkability”, which is applied to the brand’s products spanning across the dress, dress casual, relaxed casual and active casual leather footwear categories. In 2009, Rockport continued to expand its international distribution. The brand now does business in more than 55 markets worldwide. Sales outside of the United States now account for close to half of Rockport’s total business and double-digit percentage growth is planned in the near term.

Page 38 of 76

Build a dual gender business
In 2009, Rockport further strengthened its investments in its women’s product and design teams. This investment is expected to translate into solid growth in the women’s business in 2010, with the introduction of balanced, holistic, branded women’s lines that provide the female consumer with a value proposition that incorporates both fashion and comfort, thereby freeing her of the need to compromise either of these elements in her decision to purchase leather footwear.

Roll out a profitable mono-brand retail concept
Rockport will drive the global rollout of its newly created mono-brand retail concept, whose prototypes are currently being piloted in select markets. Based on encouraging results to date, Rockport is accelerating the expansion of its new mono-brand retail concept in the USA and piloting stores in additional markets in 2010. Full-price own-retail stores are expected to comprise more than a fifth of total sales by 2014 and are planned to be the main driver of growth within the brand over that period.

Build effective organisational processes
2009 saw increased focus on a number of operational areas including forecasting and order processing accuracy, lead-time reduction, product range segmentation and productivity and supply chain complexity reduction. In 2010, Rockport will continue its focus to improve these and additional operational areas that are critical to the continued success of the business.
Page 39 of 76

In addition, Rockport plans to further leverage the Group’s infrastructure (e.g. in emerging markets) as a core element in supporting its global growth strategy.

Key strategic product initiatives and innovation
The Rockport brand continues its commitment to incorporate innovative concepts and advanced technologies into its products. Following on the highly successful 2009 re-launch of its DresSport® 2 collection, which marries athletic innovation and contemporary style to make it one of the most comfortable, stylish and lightweight men’s dress shoe collections on the market, in 2010 Rockport will debut its innovative new TruWALK product architecture. TruWALK was developed as a result of decades of biomechanical and physiological research and provides the wearer with a soft strike and smooth roll that mimics the foot’s natural walking motion. Rockport will also continue to leverage Group-wide resources with the continued incorporation of industry-leading technologies such as adidas adiPRENE® and adiPRENE+® footbed technology into its products.

Page 40 of 76

Apparel Product of Rockport



Page 41 of 76


Page 42 of 76


Taylor Made was founded by an entrepreneur named Gary Adams, who spent as much time as he could play golf. His entrepreneurial creation was predicated on his greatest passion, a company with foundation that rested on a singular innovation that became a golf industry standard. That product, the Taylor Made Metalwood, changed the face of golfing across the globe. During the seven centuries of golf's recorded history, the game that originated in the Scottish Highlands underwent comparatively few technological changes. The only equipment used to play the game--balls and clubs--remained technologically the same for generations, and sometimes for centuries, before a new type of ball or a new type of club gained widespread use. From the era of the Crusades to the dawn of industrialized society in the 19th century, the advancements in golf equipment were few and far between. In golf's modern era, when the number of golfers in the world rose exponentially and a new class of golfer--the professional--competed for multimillion-dollar purses, the speed at which technological change occurred became decidedly swifter. Golf had evolved into big business, with manufacturers vying for control of a market that was becoming increasingly lucrative. Although the financial incentive for developing a superior product was large, its size made it no easier to obtain. Golf was a difficult game to master and a difficult game for which to make technological improvements. Many innovations failed miserably after their market introduction, but for those few advancements that won over customers and met the approval of the professional ranks, the rewards were lasting and significant. Taylor Made was one of the handful of manufacturers able to carve a place for itself in the golf industry with an innovative product that earned the confidence of golfers worldwide. The credit for the innovation fell to the company's creator, Gary Adams.

Roughly a decade before Adams began his fateful experimentation, a surlyncovered, two-piece golf ball made its debut on the market. The two-piece golf balls traveled farther than any ball in the history of the sport, making it an
Page 43 of 76

instant necessity for any serious golfer. Two-piece golf balls quickly became the ball of choice for the golfing public and for professionals alike, offering the one advantage that translated into success in the golf equipment industry: distance. Increasing distance was the objective Adams was pursuing when he began tinkering in the late 1970s with different materials for making golf clubs. Using the superior two-piece golf balls, Adams discovered the balls traveled a greater distance when struck with a club made out of metal than with the traditional persimmon and laminated wood clubs used universally. The essence of his pioneering work completed, Adams designed the first Premium Metalwood driver and formed a company to manufacture and market his creation, the Taylor Made Golf Co., which started in McHenry, Illinois in 1979. The patented, stainless steel Taylor Made Metalwood clubs were first presented to the public at the Professional Golf Association's (PGA) Merchandise Show in 1979. Not surprisingly, buyers at the show examined the new clubs warily. Technological change in the golf industry occurred at a glacial speed and, consequently, skeptics were not hard to find. For those who tried the odd-looking clubs made by an unknown start-up company, the reaction was positive, but for Adams to make his fledgling company a success he knew he needed to convince a particular type of golfer that metal drivers were superior to conventional clubs. In the golfing world, professionals were the ruling class, the arbitrators of success or failure for all manufacturers. Less skilled golfers looked up to professionals, noted the equipment they used and, more often than not, based their purchasing decisions on the brands chosen by professional players. Tournament victories recorded by a particular player using a particular brand of equipment were the heart of marketing in the golf industry. Put a manufacturer's product in the hands of a winner and that manufacturer gained a significant advantage over other competitors. Adams realized this fact and made it his primary objective from the start of Taylor Made's existence. In his company's inaugural year, Adams convinced 47 professionals competing in the 1979 PGA Club Professional Championship to play with Taylor Made's metal clubs. Skeptics who eyed the clubs distrustfully at the PGA's trade show were quick to change their perspective, as the Taylor Made brand and its unique metal clubs achieved their first step toward legitimacy among golfing aficionados in the United States. By the end of 1980 the company's sales were beginning their rise, fueled by the exposure Taylor
Page 44 of 76

Made Metalwoods were receiving on the national professional circuit. Three years later anxiety stemming from whether metal clubs would ever catch on as a widespread phenomenon within the golf industry was no longer a concern. By 1983 Taylor Made Metalwoods prevailed on the national tour, where an average of 60 Taylor Made clubs were in play each week and, consequently, were highly popular items in pro shops and retail outlets across the country. Metal, from this juncture forward, was the preferred material used in manufacturing golf clubs. Adams's pioneering work had taken hold.

Taylor Made has accrued six brands

Page 45 of 76

Company History

The second largest manufacturer of golf clubs in the United States, Taylor Made Golf Co. designs and markets a complete line of clubs for men, women, and children, as well as golf accessories and golf bags. Taylor Made scored its initial success with its first product, metal drivers, which debuted in 1979 and subsequently dominated the golf market. With its focus on research and development and aggressive marketing, the company grew to be the second largest U.S. golf manufacturer by the mid-1990s, a ranking attained because of the popularity of its Burner Bubble drivers, introduced in 1995. In 1997 Adidas AG acquired Salomon, Taylor Made's parent company, thereby creating Adidas -Salomon Group. Taylor Made was organized as a wholly owned subsidiary of Adidas -Salomon Group. Headquartered in Carlsbad, California, Taylor Made had operations in Japan, Great Britain, New Zealand, and Canada.

TaylorMade Golf Strategy

TaylorMade-adidas Golf’s aim is to be the leading performance golf company in the world in terms of sales and profitability. It combines three of golf’s most well-known and respected brands: TaylorMade, adidas Golf and Ashworth.
Page 46 of 76

The segment’s primary strategic pillars are to continuously develop and commercialise innovative, technologically advanced products while at the same time maintaining credibility through high visibility on professional golf tours. In addition, leveraging brand equity through the creation and execution of new marketing and retail initiatives as well as improving global distribution are key priorities for long-term growth. TaylorMade-adidas Golf implements a multi-brand strategy comprised of three well-defined golf brands under one roof. TaylorMade is the market leader in the metalwoods category, is among the leaders in irons, and is steadily evolving as a challenger in golf balls. adidas Golf develops high-performance footwear and apparel for athletes who want to maximise their physical potential in order to play the game at the highest level. Ashworth is an authentic golf-inspired lifestyle brand complementing adidas Golf’s position, increasing the segment’s presence in the golf apparel market. Combining adidas Golf and Ashworth, TaylorMade-adidas Golf is a global leader in golf apparel and number two in footwear.

Company Perspectives

We love to make golf clubs. This is a Taylor Made belief shared by all our employees. The reason we love to make golf clubs is that our values revolve around innovation, caring and being balanced. We love product innovation and the search for building better drivers, fairway woods, irons and putters. Innovation is respected and valued by not only R&D and marketing, but by all our employees. Golf is a continual quest for improvement, for that one perfect round. At Taylor Made we have that same quest for improvement and perfection in all our clubs.

Page 47 of 76

Innovation and technology focus

TaylorMade-adidas Golf’s core objective is to create the best performance golf products in the marketplace, and that starts with a clear commitment to innovation and technology. The segment therefore strives to extend its leadership position with a continued focus on innovation and cutting-edge design while introducing at least one major product innovation or evolution every 12 to 18 months. In 2009, for example, TaylorMade introduced its new R9™ drivers incorporating Flight Control Technology, which for the first time gave players the ability to easily change the club’s face angle, loft and lie angle by adjusting a screw in the sole. Prior to this, Tour professionals had their drivers altered to suit their swing by having equipment technicians bend the clubhead. This type of innovation helped the R9™ achieve the position as number one driver model on the PGA Tour and best-selling driver model in the United States.

Tour validation as important strategic pillar
Golfers of all levels are influenced by what equipment the best professional players in the world play with and wear. Hence, TaylorMade-adidas Golf’s leadership and presence on the world’s major professional golf tours is imperative to increasing brand exposure and traction among consumers. To attract the most talented players, TaylorMade-adidas Golf offers a comprehensive service to the world’s leading players. For example, the TaylorMade support fleet travels the PGA and European Tours from event to event, each with a fully staffed, state-of-the-art workshop for building and servicing drivers, fairway woods, hybrids, irons, wedges and putters on the spot. Today, the TaylorMade-adidas Golf Tour Staff includes high-profile names like Sergio Garcia, Sean O’Hair, Yong-Eun Yang, Dustin Johnson, Fred Funk, Justin Rose, Paula Creamer, Retief Goosen, Greg Norman, Nick Faldo, Mike Weir, Andres Romero, Darren Clarke and Natalie Gulbis, as well as Martin Kaymer, one of the European Tour’s stars and the top-ranked golfer in Germany, who joined the TaylorMade Tour Staff in 2009.
Page 48 of 76

Marketing excellence as a key success factor

Well-coordinated and consumer-relevant marketing is paramount to attaining sustainable market leadership. To achieve that, TaylorMade-adidas Golf has combined product marketing, brand communication and retail marketing into one fully integrated global marketing team. This team uses a variety of strong marketing tools to achieve its objectives. Product launches are supported by substantial PR and marketing campaigns, involving key assets and best-inclass customer support to drive new product sell-through. In addition to traditional marketing techniques, TaylorMade-adidas Golf is also dedicated to exploring and executing new and innovative ways to promote products using social media (Facebook and Twitter), online initiatives like and product seeding initiatives like last year’s free Burner® 6-iron giveaway and the Penta TP free-sleeve programme in 2010. Another prime example of TaylorMade-adidas Golf’s efforts to create unique promotional events is the “Wear in the World” golf adventure, which involves testing performance apparel in some of the world’s most extreme weather conditions. Destinations included golf courses in Death Valley, California, the high altitudes of Bolivia and Argentina and Walker Bay in South Africa. The programme, which illustrates how technologies such as CLIMACOOL®, CLIMALITE® and CLIMAPROOF® can help provide a competitive advantage in the most extreme golf conditions, attracted widespread attention from consumers and the media.

Intelligent retail marketing and distribution

TaylorMade-adidas Golf works with retail partners that possess the skills to effectively showcase the performance advantages and modern design credentials of TaylorMade, adidas Golf and Ashworth products. Core channels include green grass retailers, off-course golf specialty retailers and sporting goods retail formats with golf-specific departments. Focusing on strategic accounts, TaylorMade-adidas Golf strives to create and make
Page 49 of 76

available state-of-the-art floor displays that show off products and communicate key messages as clearly as possible, allowing it to position its clubs, balls, footwear and apparel among the top-selling golf products in these retail channels. Close working relationships with key accounts will continue in 2010, as will efforts to build additional brand presence at smaller retailers and on-course golf shops. In emerging markets throughout the world, the company employs established adidas Group infrastructures to distribute products, promote awareness and drive growth.

Authenticity through Ashworth

The acquisition of Ashworth presents TaylorMade-adidas Golf with a unique opportunity to establish a lifestyle business. Through the combination of adidas Golf and Ashworth, the segment is now the leading manufacturer in the golf apparel market. The acquisition allows adidas Golf to sharpen its focus and leadership in performance apparel, while under its new multi-brand approach Ashworth can be refocused to golf lifestyle. Its roots in golf and authenticity as a golf brand provide a key differentiator from other golf lifestyle brands. From a product perspective, the brand will primarily focus on extending its leadership in functional cotton products that deliver a modern look and will prioritise the men’s segment. In line with TaylorMade -adidas Golf’s strategy, Ashworth will also seek to build Tour visibility and credibil ity utilising partners such as Tour professional Fred Couples. While maintaining two distinct brands, to maximise the commercial opportunity of the acquisition, all operating and go-to-market functions have been fully integrated to take advantage of operational and fixed cost synergies.

Pricing strategy reflects brand positioning
TaylorMade-adidas Golf’s pricing policy mirrors the positioning of its three brands. TaylorMade’s pricing strategy is to dominate the market at premium price points and compete aggressively in the high-volume mid-price segment. adidas Golf supports its market reputation as the innovation leader by selling
Page 50 of 76

its products primarily at premium price points. Ashworth positions products in the mid- and premium-price categories. Market share expansion, particularly in golf, is driven mainly by the ability to deliver best-in-class lines of products at multiple price points. In 2009, an example of TaylorMade-adidas Golf’s success in implementing this strategy is the TOUR360 Limited (high-price) footwear and FitRx (medium-priced) footwear.

TaylorMade: extending leadership in metalwoods and irons

TaylorMade category priorities include strengthening its position as the number one metalwood brand in the world, building on its growing global market share in irons and increasing its presence in wedges, putters and balls.

Metalwoods: Today, TaylorMade is the clear market leader in metalwoods (drivers, fairway woods and hybrids). The brand is particularly strong in the USA, where it has forged a 30% share of the market and a large lead over its closest competitor. The brand’s primary focus going forward is to remain the innovation leader and expand its metalwood business outside the USA. This will in part be driven by strengthening its promotion partnerships in other regions. From a product perspective, the brand will build on the success of the R9™ franchise forged in 2009 with the launch of the R9™ SuperTri, the first club to unify all of TaylorMade’s major driver technologies: Movable Weight Technology®, Flight Control Technology, Inverted Cone Technology and Ultra-Thin Wall Technology, as well as the extension of the Burner® family of metalwoods with the introduction of the Burner® SuperFast, which, at 284 grams, is the lightest driver TaylorMade has produced to date. Together, the R9™ SuperTri and the new Burner® SuperFast driver will be promoted with an extensive television, online and print campaign called “TaylorMade vs. TaylorMade”.

Irons: In 2009, the new Burner® irons have provided TaylorMade with a strong foundation for future growth in the category. As opposed to previous TaylorMade irons, the Burner® long-irons, middle-irons and
Page 51 of 76

short-irons were developed separately rather than in conjunction with each other. Their immediate popularity made Burner® the first TaylorMade iron model to reach number one in sales in the United States, which in turn helped TaylorMade reach number one in iron market share in the United States for the first time in the brand’s history, a position it has now held since August 2009. In 2010, TaylorMade will leverage this success with various product updates and geographic expansion.

Wedges: Leveraging TaylorMade’s success in metalwoods and irons to other categories such as wedges continues to be a strategic priority. Innovation again is critical in this respect and, in 2009, TaylorMade debuted Exchangeable Face Technology (xFT) in the category. xFT permits players to easily replace a worn clubface with a new one, making it possible to maintain a fresh, spin-inducing clubface without replacing the clubhead. For the consumer, this is more cost-effective than buying a new wedge. In light of the USGA and R&A’s recent ruling dictating that iron-groove design must be less aggressive to promote less backspin, xFT offers a distinct advantage which should allow TaylorMade to grow its market share significantly in 2010.

Putters: TaylorMade’s Rossa® Monza® Spider high-MOI putters continued to be in high demand by golfers everywhere, and were used to win multiple tour events around the world. A 2009 addition to the line, the Monza® Spider Balero, is extremely popular in Asia and helped make TaylorMade the number two putter brand in Japan. Plans in 2010 call for a new addition to the Monza® Spider line that incorporates the input and suggestions of a variety of Tour pros.

Golf balls: Success in this category depends on the ability to create high-performance golf balls, bring them to market and build credibility among Tour professionals. In 2009, TaylorMade’s status as a maker of premium golf balls was enhanced when Tour professional Yong-Eun Yang captured the PGA Championship using a TP Red, the first time a major championship was won with a TaylorMade ball. In 2010, TaylorMade will continue to build on its momentum in golf balls, driven by the Penta TP ball. This is the first five-layer golf ball, designed to promote optimum performance on the five critical golf shots – driver,
Page 52 of 76

long-iron, middle-iron, short-iron and partial wedges. TaylorMade intends to enhance marketplace acceptance and sales in the golf ball category by extending TaylorMade branded offerings, and increasing the number of Tour professionals using TaylorMade balls.

Adidas Golf: setting new standards in highperformance footwear and apparel

Adidas Golf makes high-performance golf footwear and apparel for athletes who want to maximise their physical potential in order to play the game at their highest level. Therefore, the brand’s array of products embodies its popular maxim – Equipment For Your Body™. In footwear, leveraging proprietary technologies from various other adidas categories such as adiPRENE®+ with golf-specific technologies offers a significant competitive advantage over pure play golf footwear brands. In 2009, adidas Golf was able to bring significant new innovation to market including the ultra-stable TOUR360 4.0 with revolutionary THiNTech technology, and TOUR360 Sport with “50/50 protect”, as well as the ultra-comfortable FitRx and FitRx Sport. In apparel, adidas Golf positions itself as the most innovative performance brand in the game by utilising adidas technologies such as FORMOTION™, CLIMACOOL® and CLIMAPROOF® technologies in adidas Golf apparel products. adidas Golf was the first major brand to incorporate technologies like these into golf apparel. In 2010, a variety of exciting new launches such as a new premium offering called adiPURE™ (footwear and apparel) will continue adidas Golf’s authentic union of design, technology and function. In addition, the brand will begin to leverage its partnership portfolio further. New signature lines planned with Natalie Gulbis and Paula Creamer designed for and with input from these two highly popular and visible LPGA stars will help adidas Golf expand its line of women-specific golf products. Also planned is the TOUR360 4.0 Sport, which offers a new approach to combining breathability with protection, and a new range of CLIMACOOL® tops and bottoms with soft-touch COOLMAX® fabric.

Page 53 of 76

Apparel Product of Taylor made



Page 54 of 76


Ashworth, which was acquired in 2008, provides TaylorMade-adidas Golf with a unique opportunity to establish a golf lifestyle business. Founded in 1987, Ashworth’s roots in golf and authenticity as a golf brand provide a key differentiator from other golf lifestyle brands. In 2009, Ashworth’s efforts focused on creating a platform for future profitable growth. Steps taken consist of a branding facelift including modernising its iconic Golfman logo, definition of product range architecture, cleaning up of distribution and revamping its partnership portfolio. In addition, all Ashworth operating and goto-market functions were fully integrated with adidas Golf to take advantage of operational and fixed-cost synergies. In 2010, the brand will be re-launched with a focus on reconnecting with all golfers (professionals and non-professionals alike) as the authentic golf brand, building on its reputation for relaxed, lifestyle-orientated apparel that appeals to golf enthusiasts of all ages, both on and off the course. Products will incorporate proprietary EZ-Tech fabrics which deliver easy care and superior wear, and performance fabrics for warm-climate, on-course use. Like the other brands in the TaylorMade-adidas Golf segment, Ashworth will seek to build Tour visibility and credibility utilising partners such as Tour professionals Fred Couples, Sean O’Hair, Ryan Palmer and Charles Howell III.

Company History

Ashworth, Inc. is a leading producer of golf apparel and sportswear. An innovative company, Ashworth revolutionized the golf apparel industry in both fashion and function. The company changed golf style from polyester and hard collars to cotton and twill. Originally producing only men's fashions, Ashworth has grown to design comfortable styles for women and young men. Its variety of products is distributed worldwide at country clubs, pro shops, and upscale department and specialty stores.

Page 55 of 76

Starting Out As Charter Golf, Inc.

Ashworth was created through the partnership of Gerald Montiel, the entrepreneur, and John Ashworth, the golf fanatic. In 1984, after selling a small chain of craft stores that he had started, Montiel decided to open a chain of sporting goods stores. While at a golf tournament in Albuquerque, New Mexico, he met Ashworth, who was caddying for a friend on the pro tour. Just getting the sporting goods chain off the ground, Montiel offered Ashworth a job as a golf apparel and equipment buyer for his new stores. Within two years, with Montiel's wife having divorced him and the two partners now sharing a condo in Denver, the sporting goods chain was liquidated and the two began planning their next business, a chain of golf driving ranges. The idea to produce golf clothes came up while they were driving down the California coast looking for possible range locations. Ashworth thought that golf needed something better than the current styles of polyester pants and hard collars. The company was started even though neither one of them knew anything about the clothing business. Montiel began raising money to get the company on its feet, while Ashworth began developing the designs. Working out of a dingy office in Los Angeles's garment district and starting to lose money, Montiel decided to take the company public. Despite not having generated any revenue or product yet, Montiel was able to sell the idea to Grady and Hatch, a New York-based underwriter. They had agreed to sell 42 percent of Charter Golf for $1.2 million, but had to cancel the deal because of the October 1987 stock market crash. Undaunted by the setback, Montiel started to sell the shares himself. Selling 20 percent of Charter at 75 cents per share, he was able to raise $685,000 by March 1988. With Montiel raising capital, Ashworth went to work and convinced a local manufacturer to provide 200 all-cotton sample shirts, which Ashworth sold to golf shop buyers he knew in southern California. By the end of its first year Charter Golf had sold $374,000 worth of its Ashworth line of shirts, pants, and shorts, but had lost $324,000. Knowing good publicity was required for the company to be successful, the partners needed to find a big name to promote the line. Ashworth turned to a friend on the PGA Tour and consequently signed golfer Fred Couples to an endorsement deal, paying him in Charter Golf stock rather than cash.

Page 56 of 76

Charter Golf Begins to Grow

As the comfort and style of their clothing began to catch on, Charter Golf's sales for fiscal 1989 were $2.14 million compared to the previous year's $374,000. Needing more room for distribution, Charter Golf relocated from its Oceanside facility to a new 14,000-square-foot headquarters in Carlsbad, California. With another PGA Tour Player, John Cook, added to its list of endorsers, the company continued to grow, increasing its market to 2,300 pro shops and resorts. Charter Golf reached the NASDAQ board in 1990 under the symbol CGOL. The company marked its first profitable quarter, reporting earnings of $32,000 on sales of $972,000. The increased sales prompted Ashworth to be named the fastest-growing line of golf shirts in America by Golf Pro Merchandiser magazine. Also in 1990, Scott Verplank and Mark Wiebe joined Couples and Cook as company endorsers. Expecting more growth in 1991, Charter Golf moved into a new 35,000-square-foot facility in Carlsbad. Charter Golf had created its success by following one simple motto: Keep it simple, and two years ahead of everyone else. They managed to appeal to the younger generation of golfers by making comfortable golf clothes. By early 1991, accounts had to grown to 3,000, with products sold in 41 percent of resorts around the country. That total was dramatically up from 16 percent the year before. By late 1991, the company had grown to 3,500 accounts, with about 2,800 of those being golf course pro shops. Now looking to foreign markets, deals were signed to distribute Ashworth apparel in European and Japanese markets. The company entered into a multi-year agreement with Nissho Iwai, a major Japanese trading company, to market products in Japan. They expected these new markets to represent eight to ten percent of total sales volume by the next year. Charter Golf's success was even shared by the professionals who endorsed their product. Fred Couples had the PGA Tour's lowest stroke average in 1991 and was named the PGA player of the year by Golf World magazine. He had another great year in 1992, winning the Masters and being named PGA player of the year for the second year running. Dave Stockton, the captain of

Page 57 of 76

the U.S. Ryder Cup team, also began wearing Ashworth, becoming the first player on the Senior Tour to wear the brand. In 1992, a survey by Golf Pro Merchandiser again named Charter Golf's Ashworth line as the fastest-growing line in the country and number one in customer preference. Buoyed by its success, Charter Golf had another public offering in February 1992, selling 1.5 million shares at a price of $7.25 per share. With new capital and increasing orders, the company opened a new 42,000-square-foot distribution center next to its corporate headquarters. The new facility had four times more storage space than the previous one and could support sales volumes of $125 million. Frequently customizing its Ashworth line to put the country club or course logo on the apparel, Charter Golf was now selling to about 3,200 of the nations 11,500 pro shops and resorts, with the average shop bringing in $8,351 in merchandise in 1992. They continued to expand in Europe and Japan as well, selling to more than 15 countries. Foreign accounts made up seven percent of 1992 sales, while the new women's line accounted for 12 percent of total sales.

Introducing New Product Lines

Now selling products all over the world, Charter announced in 1993 that it would introduce a new clothing line. The new line differed from the Ashworth line in that it was to be sold in department and specialty stores, rather than the traditional golf pro shops. The new line, sold under the fictional name Harry Logan, had its own designs and had a sales force separate from the Ashworth line. The company hired CBS sports announcer Jim Nantz as the spokesman for the new line. Adding more products to the mix, the company also entered into the hat business, trying to catch a piece of the $100 million annual sales.

Charter Golf Becomes Ashworth, Inc.

Page 58 of 76

In 1994, Charter Golf officially adopted the name of its premier clothing line and became known as Ashworth, Inc. While the name changed, the sales figures did not. Its continued strength in the golf industry had Ashworth repeatedly ranked as one of the top 50 fastest-growing companies by several national magazines. The number of golf shops carrying the line increased to 4,100, with average sales per shop jumping to $9,607. Strengthened by the company's success and his own achievements, Fred Couples entered into a lifetime contract to represent the company. The contract gave him a combination of cash and stock options, making him the company's largest stockholder. Ashworth also announced that Couples would endorse the company's new line of shoes, scheduled for release in 1995. Other Ashworth golfers had successful years in 1994 as well. Ernie Els won the U.S. Open and was ranked number three on the Sony World Golf Rankings, while Dave Stockton continued winning on the PGA Senior Tour.

Growing Pains

Despite numerous growing pains in 1995, the company still managed to have its eighth straight year of growth. Ashworth's products were being sold in over 30 countries around the world, with the international division representing 24 percent of total business. The Harry Logan line, which was now in over 500 specialty and department stores, saw sales increase to $4.41 million. In addition, Ashworth opened ten factory stores to sell prior season and irregular merchandise. The company did have some troubles in 1995. Ashworth announced in May 1995 that it was going to discontinue its womens and childrens lines. Citing that the womens and childrens lines were poor uses of the company's expenses and resources, Ashworth returned its focus to its line of mens products. Also, the company ran into some problems as it tried to upgrade its computer and information systems. The process took longer than expected and caused delays in shipping as the company was running on one system while starting the other. At the end of 1995, Rick Werschkul left his position as president and CEO of the company leaving Chairman and cofounder Gerald Montiel to take over his duties for the company. Despite the troubles in 1995, Ashworth was again ranked the fastest-growing, number one brand of golfwear in America. Ashworth had expanded its product
Page 59 of 76

mix to now include apparel (shirts, pants, sweaters, shorts, vests), accessories (watches, socks, boxers), shoes, weather gear, and hats.

Changes Begin at Ashworth

In December 1996, Randy Herrel, Sr., became president and CEO after a successful stint in the same position at Quicksilver, the country's largest surfwear manufacturer. Herrel brought a no-nonsense attitude with him to Ashworth. During his six years at Quicksilver, sales had risen from $90 million to $190 million and earnings per share from a nickel to $1.65. He knew Ashworth needed considerable retooling, but he also saw cause for hope, and parallels between his old company and his new one. While Ashworth's operations, customer service, and management required repair, the company was still an industry leader. Ashworth announced in 1996 that it would launch a new golf label for 1997 and would be making all levels of merchandise available for pro shop and department store accounts. Each of its three types of merchandise were clearly defined by style and geared for certain demographics. The new line, Golfman, targeted 16- to 25-year-olds, and included T-shirts, shorts, graphic prints, and some denim. The Ashworth core line continued to target golfers age 25 to 45, with solid, printed, and jacquard knit tops and twill bottoms. The Harry Logan line moved to focus on 45- to 65-year-olds, evolving into a more formal collection of sportswear, sport coats, fine-gauge knits, merino wool, and cashmere pieces. As a way to improve sales even further in pro shops and department stores, Ashworth developed the concept of the Golfman Shop. The Golfman Shop was a merchandising system that integrated the Ashworth product line into one selfcontained marketing unit. Set up in the retail stores, the Shop readily adapted to changing inventory levels and new product development, while displaying a variety of Ashworth merchandise. Ashworth also opened its own store in June 1997. The Ashworth Studio, located in at South Coast Plaza in Costa Mesa, California, offered a full line of golf apparel, weathergear, and hats, plus home and office furniture, luggage, and bathing accessories.

Page 60 of 76

At the end of 1997, the Darrel Survey, a consumer survey conducted with golfers across America, named Ashworth the number one brand in golf. With a 10.4 percent market share, Ashworth became the first brand to surpass a 10 percent market share in golf since 1985. The survey showed that the company maintained the most popular brand with golfers under 30 years old, as well as showed that its product was worn by 25 percent of the best golfers (0-5 handicap) in the United States.

Goal Set for

The company continued to look for ways to improve in 1998 and especially wanted to expand the core business into existing retail operations, both by improving designs and being more aggressive with the Golfman Shop program. Ashworth also wanted to gain new distribution into pro shop accounts and upscale department stores, expanding on its already existing 4,500 accounts. Finally, the company wanted to continue to be a productdriven and innovative company, strengthening the Ashworth image for fashion and function. To expand its core business, Ashworth relaunched its women's line for spring 1998. The company had not manufactured a women's line since 1993, when it discontinued the line because of poor sales. This time the company set up a design staff and customer service staff to focus on its women's division. Projected volumes for the women's line were at least $5 million, with pro shops accounting for up to 90 percent of sales. Ashworth also launched its AGCo label in 1998. The label, targeted at the young golfer, was sold in pro shops and resorts, but was expected to earn higher sales from department and specialty stores. The line consisted of knits, wovens, pants, shorts, fleece items, jackets, wind shirts, sweaters, and hats. Prices for the new AGCo line were set to be competitive with other manufacturers. The company looked to strategic alliances with golf properties to increase its distribution. Ashworth developed three-year strategic alliances with two major golf property management firms, Club Corporation of America (CCA) and Troon Golf. Working to add other management firms, they anticipated the company would have three-year alliances with over 300 of the premier volume-producing properties in the United States. The Golfman Shop
Page 61 of 76

program would be used in each case to secure at least 20 percent of the properties' floor space. The company added 20 Golfman shops in early 1998, bringing the total to 220. Ashworth also continued to be an innovative company. Using the latest developments in fiber and garment technology, Ashworth established itself as the first golf apparel company to create an entire line of technical clothing. Its Weather Systems line featured knit-solar protection fabric, moisture-removing performance knits, and new lightweight, waterproof, breathable clothing.

The Future of Ashworth

Co-founder Gerald Montiel announced he would retire from Ashworth on December 31, 1998. He planned to remain a stockholder in the company and looked forward to watching the company continue to grow. With 550 Golfman Shops in place and product placements increasing, the company presumably would have no problem keeping Montiel happy.

Lists of Store


Van's Golf Shop - Apache 801 S. Power Road #115, Mesa, AZ 85206 Phone: (480) 985-0601 Van's Golf Shop - Camelback 3217 E. Camelback, Phoenix, AZ 85018 Phone: (602) 957-0001 Van's Golf Shop - Frank Lloyd Wright 8720 E. Frank Lloyd Wright, Scottsdale, AZ 85250 Phone: (480) 483-1800 Van's Golf Shop - Metrocenter 10430 N. 28th Drive, Phoenix, AZ 85051 Phone: (602) 997-2312

Page 62 of 76

Van's Golf Shop - Oracle 4144 N. Oracle Rd. Ste. #180, Tucson, AZ 85705 Phone: (520) 293-1381 Van's Golf Shop - Speedway 1101 North Wilmot, Ste. #101, Tucson, AZ 85712 Phone: (520) 721-2111 Van's Golf Shop - Sun City 10001 West Bell Road #118, Sun City, AZ 85351 Phone: (623) 972-0171

California (Northern)

The Golf Mart - Concord 1975 Diamond Blvd., Concord, CA 94520 Phone: (925) 680-0111 The Golf Mart - Dublin 6635 Dublin Blvd Unit B, Dublin, CA 94568 Phone: (925) 833-8950 The Golf Mart - Foster City 2401 East 3rd Avenue, Foster City, CA 94404 Phone: (650) 312-8130 The Golf Mart - Rohnert Park 5430 Commerce Blvd., Rohnert Park, CA 94928 Phone: (707) 584-4466 The Golf Mart - San Rafael 530 Francisco Blvd. West, San Rafael, CA 94901 Phone: (415) 721-0626 The Golf Mart - Seaside 2040 Fremont Blvd, Seside, CA 93955 Phone: (831) 583-1000 The Golf Mart - South San Francisco 470-A Noor Avenue, S. San Fran, CA 94080 Phone: (650) 583-4653

California (Southern)

Roger Dunn Golf shop - Anaheim 14893 East Ball Road, Anaheim, CA 92806 Phone: (714) 630-4975 Roger Dunn Golf Shop - Arroyo Grande 190 Station Way, Arroyo Grande, CA 93420 Phone: (805) 481-3866

Page 63 of 76

 

Roger Dunn Golf Shop - Cathedral City 69048 Highway 111, Cathedral City, CA 92234 Phone: (760) 324-1160 Roger Dunn Golf Shop - Fresno 5618 North Blackstone, Fresno, CA 93710 Phone: (559) 436-0464 Roger Dunn Golf Shop - La Quinta/Indio 80555 Highway 111, Indio, CA 92201 Phone: (760) 775-1414 Roger Dunn Golf Shop - Mission Viejo 28362 Marguerite Pkwy, Mission Viejo, CA 92692 Phone: (949) 364-1611 Roger Dunn Golf Shop - Newport Beach 3100 Irvine Ave., Newport Beach, CA 92660 Phone: 949-251-9245 Roger Dunn Golf Shop - North Hollywood 4744 Lankershim Blvd., Hollywood, CA 91602 Phone: (818) 763-3622 Roger Dunn Golf Shop - Rancho Cucamonga 11849 Foothills Blvd St D, Rancho Cucamonga, CA 91730 Phone: (909) 948-7959 Roger Dunn Golf Shop - Riverside 10031A Indiana Avenue, Riverside, CA 92503 Phone: (951) 687-6524 Roger Dunn Golf Shop - Santa Ana 1408 S. Village Way, Santa Ana, CA 92705 Phone: (714) 558-0074 Roger Dunn Golf Shop - Santa Clarita 24200 Main St., Newhall, CA 91321 Phone: (661) 222-7177 Roger Dunn Golf Shop - Seal Beach 13958 Seal Beach Blvd, Seal Beach, CA 90740 Phone: (562) 598-1300 Roger Dunn Golf Shop - Stockton 5756 Pacific Ave. C-20, Stockton, CA 95207 Phone: (209) 472-0280 Roger Dunn Golf Shop - Thousand Oaks 125 W. Thousand Oaks Blvd., Thousand Oaks, CA 91360 Phone: (805) 778-0050 Roger Dunn Golf Shop - Visalia 3278 South Mooney Blvd., Visalia, CA 93277 Roger Dunn Golf Shop - West Los Angeles 1801 S. Bundy Dr., Los Angeles, CA 90025 Phone: (310) 826-9003
Page 64 of 76

The Golf Mart - Del Mar 15555 Jimmy Durante, Del Mar, CA 92014 Phone: (858) 794-9676 The Golf Mart - Encinitas 1441 Encinitas Blvd #110, Encinitas, CA 92024 Phone: (760) 944-1534 The Golf Mart - Polar/Airport 3877 Pacific Highway, San Diego, CA 92110 Phone: (619) 291-3186 The Golf Mart - San Diego 1231 Camino Del Rio South, San Diego, CA 92108 Phone: (619) 298-9571 The Golf Mart - San Marcos 2055 Montiel Road #101, San Marcos, CA 92069 Phone: (760) 741-0441


Golfers' Warehouse - Hartford 75 Brainard Road, Hartford, CT 06114 Phone: (860) 522-6829


Roger Dunn Golf Shop - Honolulu 1500 Kapiolani Blvd., Honolulu, HI 96814 Phone: (808) 942-7741 Roger Dunn Golf Shop - Kaneohe 45-285 Kaneohe Bay Dr., Kaneohe, HI 96744 Phone: (808) 234-7100 Roger Dunn Golf Shop - Kihei 255 Piikea Avenue, Kihei, Maui, HI 96753 Phone: (808) 891-0886 Roger Dunn Golf Shop - Pearl City 1132 Kuala St. #402, Pearl City, HI 96782 Phone: (808) 456-5401


Golfers' Warehouse - Braintree 2 Campaneli Drive, Braintree, MA 02185 Phone: (781) 848-9777

Page 65 of 76

Golfers' Warehouse - Danvers 4 Newbury Street, Danvers, MA 01923 Phone: (978) 777-4653 Golfers' Warehouse - Natick 321-D Speen Street, Natick, MA 01760 Phone: (508) 651-2582

Rhode Island

Golfers' Warehouse - Cranston 60 Freeway Drive, Cranston RI 02920 Phone: (401) 467-8740

Ashworth, Inc. Reports First Quarter Fiscal 2008 Financial Results

Ashworth, Inc. (NASDAQ: ASHW), a leading designer of on-course golf apparel and golf-inspired lifestyle sportswear, today announced unaudited financial results for its first quarter ended January 31, 2008. Summary of First Quarter Results: Consolidated net revenue for the first quarter ended January 31, 2008 decreased 9.8% to $34.5 million as compared to $38.3 million for the first quarter of 2007. The Company reported a consolidated first quarter net loss of $7.4 million, or $0.50 per diluted share, compared to a net loss of $2.4 million, or $0.17 per diluted share, for the same quarter of the prior year. Net revenue for the domestic segment (including Gekko Brands, LLC) decreased 5.8% to $30.1 million from $32.0 million for the same period of the prior year. Net revenue from the international segment (including Ashworth, U.K., Ltd.) decreased 30.1% to $4.4 million from $6.3 million for the same period of the prior year. In the first quarter of fiscal 2008, the Company’s consolidated gross margin decreased 460 basis points to 36.2% as compared to 40.8% in the first quarter of fiscal 2007. The decrease in consolidated gross margin was driven by the
Page 66 of 76

deleveraging effects of the decrease in revenue and an increase in product costs not offset by price increases. In addition, as a result of a labor stoppage at a key headwear vendor, the Company incurred additional costs to divert the production of its NASCAR products to alternate manufacturing facilities and expedite manufacturing and transportation. Consolidated selling, general and administrative (SG&A) expenses increased 1.3% to $19.4 million for the first quarter of fiscal 2008 as compared to $19.1 million for the first quarter of fiscal 2007. As a percent of net revenues, SG&A expenses were 56.1% for the first quarter of fiscal 2008 as compared to 50.0% for the same period of the prior fiscal year. The expense increase is largely due to increased consulting fees, primarily associated with product design and supplementing the Company’s accounting function during the executive transition period, combined with the expense related to the employment and non-compete agreements entered into with the principals of Gekko on June 4, 2007. These increases were partially offset by a decrease in commission expense primarily as a result of the reduction in revenues. Analysis of First Quarter Fiscal Year 2008 Revenues by Channel The Company’s first quarter fiscal 2008 revenues decreased in all distribution channels except for the Company’s domestic golf and Collegiate/Racing distribution channels. Golf Total revenues in the domestic golf channel in the first quarter 2008 increased 5.6% to $9.5 million as compared to the same period last year. Revenues from on-course golf retailers increased 8.9% or $578,000 over the prior year, but this increase was partially offset by a decrease of $76,000 in revenues from off-course golf retailers. The Company continues to experience significant competitive pressure and market consolidation within the off-course channel of distribution. As part of the Company’s effort to restore sales growth, management is implementing new sales management processes in both the on-course and off-course channels of distribution. The Company is also establishing a number of new programs with key off-course accounts. Corporate Revenues for the corporate distribution channel were $4.1 million in the first quarter 2008, a decrease of 28.8% as compared to the same period last year. The decrease in the corporate channel was driven by certain customer event revenues that occurred in the first quarter of fiscal 2007 that did not reoccur in the first quarter of fiscal 2008, the Company’s strategic decision to discontinue sales to certain accounts and a pull-back in corporate spending as a result of uncertain economic conditions. Management is developing plans to address these declines through a retooling of sales programs and account coverage. Retail Revenues for the retail distribution channel were $3.1 million in the first quarter 2008, a decrease of 24.1% from the first quarter 2007. This decrease was driven by the consolidation of retail accounts and their associated location closures and a decision by management to exit a number of large accounts. The Company is working to open a number of new retail doors through specially tailored assortments and
Page 67 of 76

sales programs. Collegiate/Racing (The Game/Kudzu) First quarter 2008 revenues for Gekko Brands, LLC were $10.9 million, an increase of 4.6% over the first quarter 2007. This increase was primarily driven by improved penetration within the NASCAR channel combined with an additional increase as a result of having exclusive vendor rights for the 50th running of the Daytona 500. These increases were partially offset by a delay in production due to a labor stoppage at a key vendor and the absence in the first quarter of 2008 of certain corporate event revenues that occurred during the first quarter of fiscal 2007. Company-owned Outlet Stores Revenues from the Companyowned stores were $2.5 million, a decrease of 7.9% as compared to the first quarter 2007. The decrease reflects a generally difficult retail environment as well as increased promotional activity. International Revenues from the international segment decreased 30.1% to $4.4 million in the first quarter 2008, a decrease of $1.9 million from the same period last year. Net revenues for Ashworth U.K., Ltd. decreased 45.1% or $2.2 million to $2.6 million for the first quarter of fiscal 2008 from $4.8 million for the same period of the prior fiscal year. The decrease was due to distribution center inefficiencies resulting from the implementation of a new ERP system at the U.K. facility together with changes in sales management. Net revenues for the other international segment increased 19.8% or $287,000 to $1.7 million for the first quarter of fiscal 2008 from $1.4 million for the same period of the prior fiscal year. The increase was primarily due to increased purchases from the Company’s international distributors and the favorable effect of currency exchange rates, specifically versus the Canadian dollar, when compared to the prior year quarter. Balance Sheet: Net accounts receivable decreased 9.1% from the prior year, commensurate with the 9.8% decrease in revenues for the first quarter. Net inventory increased 3.2% to $58.2 million as of January 31, 2008 as compared to $56.4 million as of January 31, 2007 primarily as a result of earlier deliveries of inventory to the Company’s U.K. and Canadian operations. Overview Allan H. Fletcher, the Company’s Chief Executive Officer, commented, We are continuing to implement plans to improve our operations and cut operating costs. We are establishing channel specific product strategies and sales programs to better serve our customers and improve our profitability. We are encouraged with the improvement in our domestic core golf distribution channel, but a complete turnaround will take more time. I believe the plans we’ve started to implement will, in time, return the Company to sustainable profitability. Conference Call Investors and all others are invited to listen to a conference call discussing first quarter fiscal year 2008 results, today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Domestic participants can access the conference call by dialing 800-7658779. International participants should dial 480-248-5081. Callers should ask to be connected to Ashworth's first quarter earnings teleconference or provide the conference ID number: 3853161. The call will also be broadcast live over
Page 68 of 76

the Internet and can be accessed by visiting the Company's investor information page at About Ashworth, Inc. Ashworth, Inc. (NASDAQ: ASHW) is a leading designer of men’s and women’s golfinspired lifestyle sportswear distributed domestically and internationally in golf pro shops, resorts, upscale department and specialty stores and to corporate customers. Ashworth’s three market-leading brands include: Ashworth Collection (TM), a range of upscale sportswear designed to be worn on and off-course; Ashworth Authentics (TM), which showcases popular items from the Ashworth line; and Ashworth Weather Systems, a technical performance line. Ashworth is also an Official Apparel Licensee of Callaway Golf Company. Ashworth is also a leading designer, producer and distributor of headwear and apparel under The Game and Kudzu brands. The Game is a leading headwear brand in collegiate bookstores and Kudzu products are sold into the NASCAR/racing markets and through outdoors sports distribution channels, including fishing and hunting. Ashworth is also the exclusive on-site event merchandiser for the Kentucky Derby. For more information, please visit the Company’s Web site at Forward-Looking Statements This press release contains forward-looking statements related to the Company’s market position, finances, operating results, marketing and business plans and strategies within the meaning of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may contain the words believes, anticipates,expects,predicts, estimates, projects, will be, will continue, will likely result, or other similar words and phrases. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, changed circumstances or unanticipated events unless required by law. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the uncertainties associated with implementing a successful transition in executive leadership, successful resolution of the current dispute with Callaway Golf, the impact of borrowing base limitations in the Company’s new credit facility, the evaluation of strategic alternatives that may be presented, timely development and acceptance of new products, as well as strategic alliances, the integration of the Company's acquisition of Gekko Brands, LLC, the impact of competitive products and pricing, the success of the Sun Ice and Callaway Golf apparel product lines, the preliminary nature of bookings information, the ongoing risk of excess or obsolete inventory, the potential inadequacy of booked reserves, the successful operation of the distribution facility in Oceanside, CA, the successful implementation of the Company's ERP system, and other risks described in Ashworth, Inc.'s SEC reports, including the annual report on Form 10-K for the year ended October 31, 2007
Page 69 of 76

quarterly reports on Form 10-Q filed thereafter and amendments to any of the foregoing reports, including the Form 10-K/A for the year ended October 31, 2007. ASHWORTH, INC. Consolidated Statements of Operations First Quarter ended January 31, 2008 and 2007, (Unaudited) Summary of Results of Operations 2008, 2007 First Quarter Net revenue $ 34,519,000 $ 38,272,000 Cost of goods sold, 22,021,000, 22,655,000. Gross profit 12,498,000 15,617,000 Selling, general and administrative expenses 19,362,000. 19,117,000 Loss from operations (6,864,000 ) (3,500,000 ) Other income (expense): Interest income 30,000 37,000 Interest expense (1,007,000 ) (601,000 ) Other income (expense), net 610,000 (16,000 ) Total other expense, net (367,000 ) (580,000 ) Loss before income taxes (7,231,000 ) (4,080,000 ) (Provision) benefit for income taxes (192,000 ) 1,632,000 Net loss $ (7,423,000 ) $ (2,448,000 ) Loss per share BASIC ($0.50 ) ($0.17 ) Weighted-average common shares outstanding 14,714,000 14,520,000 Loss per share DILUTED ($0.50 ) ($0.17 ) Adjusted weightedaverage shares and assumed conversions 14,714,000 14,520,000 ASHWORTH, INC. Consolidated Balance Sheets As of January 31, 2008 and 2007 (Unaudited) January 31, January 31, ASSETS 2008 2007 CURRENT ASSETS Cash and cash equivalents $ 4,207,000 $ 3,966,000 Accounts receivable-trade, net 25,086,000 27,602,000 Inventories, net 58,199,000 56,376,000 Other current assets 8,567,000 12,898,000 Total current assets 96,059,000 100,842,000 Property and equipment, net 36,232,000 39,066,000 Other assets, net 25,424,000 25,800,000 Total assets $ 157,715,000 $ 165,708,000 LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Line of credit payable $ 31,205,000 $ 17,450,000 Current portion of long-term debt 869,000 5,830,000 Accounts payable trade 9,224,000 12,230,000 Other current liabilities 12,433,000 10,048,000 Total current liabilities 53,731,000 45,558,000 Long-term debt 11,104,000 11,495,000 Other long-term liabilities 1,624,000 2,023,000 Stockholders equity 91,256,000 106,632,000 Total liabilities and stockholders equity $ 157,715,000 $ 165,708,000. Ashworth, Inc. is a designer of men's and women's golf-inspired lifestyle sportswear distributed domestically and internationally in golf pro shops, resorts, upscale department and specialty stores and to corporate customers. Ashworth products include three main brand extensions. Ashworth Collection(TM) is a range of upscale sportswear designed to be worn on and off course. Ashworth Authentics(TM) showcases popular items from the Ashworth line. Ashworth Weather Systems(R) utilizes technology to create a balance between fashion and function in a variety of climatic conditions. Callaway Golf is a trademark of Callaway Golf Company Callaway Golf Company is an American golf company based in Carlsbad, California. They manufacture woods, irons, wedges, putters and golf balls and license its name for apparel, footwear, timepieces and accessories. . Ashworth, Inc.,
Page 70 of 76

2765 Loker Avenue West, Carlsbad, CA 92008 is an Official Licensee of Callaway Golf Company. In July 2004, Ashworth, Inc. acquired Gekko Brands, LLC ("Gekko"), a leading designer, producer and distributor of headwear and apparel under The Game(R) and Kudzu kudzu plant of the family Leguminosae (pulse family), native to Japan. (R) brands. This strategic acquisition provides opportunity for additional growth in three new, quality channels of distribution for the Ashworth and Callaway Golf apparel brands as well as further growth from The Game(R) and Kudzu(R) brands' sales into the Company's three current distribution channels. The Game(R) brand products are marketed primarily under licenses to over 1,000 colleges and universities, as well as to the PGA TOUR, resorts, entertainment complexes and sporting goods dealers that serve the high school and college markets. The Game(R) brand is one of the leading headwear brands in the College/Bookstore distribution channel. The Kudzu(R) brand products are sold into the NASCAR/racing markets and through outdoor sports distribution channels, including fishing and hunting. To learn more, please visit our Web site at This press release contains forward-looking statements related to the Company's market position, finances, operating results, marketing plans and strategies. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no responsibility to publicly release the results of any revisions to these forward-looking statements that may arise from changing circumstances or unanticipated events. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the timely development and acceptance of new products, as well as strategic alliances, the integration of the Company's recent acquisition, the impact of competitive products and pricing, the success of the Callaway Golf apparel product line, the preliminary nature of bookings information, the ongoing risk of excess or obsolete inventory Obsolete Inventory Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. , the potential inadequacy of booked reserves, the timely completion and successful operation of the new distribution facility in Oceanside, CA, and other risks described in Ashworth, Inc.'s SEC reports, including the report on Form 10-K Form 10-K.

Page 71 of 76

Apparel Product of Ashworth



Page 72 of 76

Awadrs Given to Adidas Group

Page 73 of 76

Future Business of Bangladesh and ADIDAS

German high-end brand Adidas will directly buy garments from Bangladesh for the first time, said the owner of a leading apparel company. David Hasanat, chairman of Viyellatex Group, said his company intends to start producing goods under all the brands of Adidas from next year. They started imparting training to our workers to raise their skills, to cater to such prestigious brands. He said some directors and the head of purchase for Hugo Boss visited Viyellatex, prior to placing orders. They will mainly supply T-shirts, polo shirts and basic shirts to the two brands. He also said Bangladesh would be able to sell garment
Page 74 of 76

products worth at least $100 million to the two brands within the next two years. Several mid-level brands will no longer question the image and performance of Bangladesh again, after the entry of such highly prestigious brands. The retail price of a regular Hugo Boss shirt starts at $150 and a T-shirt at $100, where other brands retail for around $40-$50 a piece, he said. Currently, Adidas buys garment items from Thailand in the region. Viyellatex Group supplies garment products to Wal-Mart, Puma, G-Star, Marks and Spencer, Esprit and s. Oliver, he said. There are renowned brands are coming to Bangladesh because of its ability to supply quality garment items at cheaper prices than other competing countries. Orders are also shifting to Bangladesh from China because of the latter's high cost of production and a shortage of workers in the apparels industry. We think that Adidas could be a very potential buyer for Bangladesh.

Page 75 of 76

Bibliography :

Page 76 of 76

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.