Adidas Tops Jordan As No. 2 Popular Sneaker Brand

Adidas has topped the Jordan brand as the second-most popular sneaker in the United States, market tracking company NPD Group announced Monday.

The news comes after the German athletic sportswear company made gains in the U.S. and China stealing market share from Nike.

"Adidas has overtaken Jordan as the #2 brand in U.S. sport footwear," tweeted Matt Powell, a sports industry analyst with the NPD Group. "This is an achievement I never thought I would see in my lifetime."

At first glance, it would seem that the company's strategy of celebrity endorsements is paying off. But don't be so quick to credit Adidas shoes popularity to Kanye West and Kylie Jenner, says NPD Group.

Adidas success comes largely on the back of its strong products, says Powell, and not necessarily from the celebrity endorsements it has strategized around.

 "The collaboration with Kanye West has significantly elevated the perception of our brand," Adidas Chief Executive Herbert Hainer told analysts in March 2016.

Adidas' rise in North America continues as its sales grew by 50% last month, compared with August 2016, and its sneaker share nearly doubled to 13%, according to NPD data.

Focus On U.S.

Two years ago, Adidas's new CEO, Danish-born Kasper Rorsted, set out to prevail the North American market. It was long the notion that Adidas did not focus on nor understood the North American consumer. A big question was how to compete with Nike's leading Jordan brand, created by the former legendary basketball player, Michael Jordan, regarded as one of the greatest players ever.

Since taking the helm in 2015, the company put an increased emphasis on improving products and narrowing its focus on the U.S., arguably the most influential shoe market in the world.

Given adidas's momentum over the past two years, it became clear that the company would surpass the Jordan brand as the number 2 sports footwear brand in the U.S. It just happened a bit earlier than anticipated.

“It came faster than I expected. I thought it wouldn’t happen until next year,” said Powell. “They are really customer centric. They are making products that the kids want to buy.”

Adidas Sales

From January through August of this year, Adidas had 11.3 percent of the U.S. market share by dollars. That was up from the 6.6 percent the brand had over the same period last year.

Meanwhile, the Jordan brand essentially stayed steady, growing only from 9.4 percent to 9.5 percent year-to-date.

The leader in the marketplace, Jordan brand owner Nike, dropped from 39 percent of the market share for the first eight months of last year to 37 percent for the first eight months of 2017.

Over the next two years, Adidas grew steadily through its originals brand like Superstar and Stan Smith, its new Ultraboost line and an endorsement deal with Kanye West to bring his Yeezy brand over from Nike.

"Kanye is often given credit for the rise, but his product offering is tiny," Powell said.

In the past two reported quarters, Adidas' overall U.S. sales growth went up 41 and 45 percent, while Nike, which has a significantly larger business, saw an increase of 3 percent in one quarter and none in the other.

It hasn't helped that basketball shoe sales have slowed down across the board, although Nike has strength in basketball with LeBron James, Kevin Durant and Kyrie Irving as endorsers.

"Nike's U.S. sales started declining around back-to-school in 2015, and it has been negative ever since," Powell said. "You have to believe at some point they're going to wake up."

Shares of Adidas are up 31.3 percent over the past year, while shares of Nike are down 3 percent.