Adidas Group To Buy Five Ten For $25 Million

Adidas Group To Buy Five Ten For $25 Million

It’s an interesting time for the climbing industry as companies continue to consolidate or be bought outright.  Last year Black Diamond and Gregory were bought by a holding company and brought together under the Black Diamond name, while today the adidas Group is announcing that they’ve agreed to purchase my favorite climbing shoe company, Five Ten, for $25 million in cash1.

The press release seems to indicate that Five Ten will continue to operate as a separate brand, but it will be interesting to see how things develop moving forward.  What do you think??

Here’s the full press release:

Herzogenaurach / Redlands, California, November 03, 2011 – The adidas Group today announced that it has signed a share purchase agreement to acquire Five Ten, a leading performance brand in outdoor action sports. The adidas Group intends to purchase the entire Five Ten business, which includes all of the issued share capital of Five Ten USA. The total purchase price is USD 25 million in cash at closing and contingent payments, which are dependent on Five Ten achieving certain performance measures over the next three years. The transaction is expected to close in the next couple of weeks.

As part of its Strategic Business Plan Route 2015, the adidas Group expects sales in the outdoor segment to exceed € 500 million by 2015 based on organic growth. Through the acquisition of Five Ten, the adidas Group will be even better positioned towards the goal to become a leading player in the outdoor market.

“We are very excited to join forces with Five Ten. Five Ten is a leading brand in the technical outdoor market and within the outdoor action sport community. Climbers, mountain bikers and other outdoor athletes around the world highly value their products,” said Rolf Reinschmidt, Senior Vice President adidas Outdoor. “Five Ten has continuously been at the forefront of innovations and shares the same passion for athletes as we do at adidas. It represents an excellent addition to the adidas Outdoor portfolio and will allow us to expand into complementary market segments. This acquisition underscores our clear commitment to the outdoors and our ambition to play a leading role in the outdoor industry going forward. I am very much looking forward to working on this journey together with Charles Cole, Founder and President of Five Ten.”

“The deal provides exciting prospects for Five Ten. Supported by the adidas Group, we can finally reach the full potential that the ‘Brand of the Brave’ has to offer,” commented Charles Cole, Founder and President of Five Ten. “Here at Five Ten, we like the philosophy of adidas’ founder Adi Dassler, with his focus on product quality and in doing whatever is necessary to give the athlete the advantage. adidas has the same principles of putting athletes and performance first that have guided Five Ten for nearly 30 years and we are thrilled to be partnering with them.”

Five Ten has been at the forefront of innovation in the technical outdoor market since the day Stealth, a revolutionary high-friction rubber compound, was created in 1985. Today, the Stealth product family includes more than half a dozen award-winning compounds that provide the highest friction to athletes in various conditions. The Five Ten Elite Team consists of some of the world’s most exciting athletes such as Dean Potter, National Geographic’s 2011 athlete of the year, JT Holmes, champion big-mountain skier and Suz Graham, the most versatile and progressive female action sports athlete in the world.

adidas is the athletic brand in the outdoors. It has a long history in innovative outdoor products including highlights such as the ‘Super Trekking’, the first light trekking shoe, being worn by climbing legend Reinhold Messner for his first Everest ascent without oxygen support in 1978. Its award-winning TERREX collection offers lightweight, technical equipment to athletes in the outdoors. The tradition of adidas founder Adi Dassler, who worked individually with athletes to make them better, continues today. adidas Outdoor has teamed up with top outdoor athletes like the Huber Brothers (Climbing, Germany), Beat Kammerlander (Climbing, Austria) and Barbara Zangerl (Climbing, Austria) as well as prestigious organizations such as Zermatt Alpin Center (Switzerland) and Ragni di Lecco (Italy).

About the adidas Group
The adidas Group is one of the global leaders within the sporting goods industry, offering a broad range of products around the core brands: adidas, Reebok, TaylorMade, Rockport and Reebok-CCM Hockey. Headquartered in Herzogenaurach, Germany, the Group has more than 46,000 employees and generated sales of € 12 billion in 2010.

About Five Ten
Five Ten is a family-owned company that is dedicated to making the best outdoor sports footwear available. It offers innovative products to athletes in categories such as climbing and mountain biking. Five Ten was founded by Charles Cole in 1985, is located in Redlands, California and employs 37 people. In 2011, annual net sales are expected to be approximately € 16 million excluding distributor business in Japan and Korea.

Update:  Not mentioned in the press release is Five Ten’s intention to maintain production of their rock shoes and a few other products in the U.S..  They will also apparently be trying to bring other production back here as well.

  1.  Maybe now they can afford to waste some money and bring back the original V10s??????

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47 Responses to Adidas Group To Buy Five Ten For $25 Million

  1. joeyjoejoe November 3, 2011 at 9:54 am #

    I’m not a businessman, but $25m seems really low to me. 

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  2. Matt November 3, 2011 at 10:03 am #

    i thought the same thing. Maybe I overestimate the outdoor and climbing markets, but 25m is way lower then what I would assume Five Ten to be worth.

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  3. Steve Schultz November 3, 2011 at 10:10 am #

    Ohhhh V10′s……..thought you’d like to hear that katie is using her originals in hueco this weekend…

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    • Narc November 3, 2011 at 10:12 am #

      BOOOMMMM!!

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      • Peter November 3, 2011 at 12:37 pm #

        goes the dynamite.

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  4. alpineurb November 3, 2011 at 10:21 am #

    Welp, looks like my favorite shoes are going to suck soon. Sweet.

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    • Not a bad thing November 3, 2011 at 10:44 am #

      I doubt they will change much of anything.  If the shoes change then no one will buy them and they will lose money.    If anything this gives more money for them to produce more kinds of shoes.  

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      • Liketheycareabout25million November 3, 2011 at 11:06 am #

        like adidas will care… they are only in for the full 25million if Five.Ten meets sales figures over the next three years. More importantly, they probably spend more than that for their annual executives retreat to the Bahamas or where ever…. Such a small amount of money for a company that cleared 567 million euro’s profit last year. I bet they spend more than 25million a year on some of their big name athletes….

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        • Montgomery Philip November 4, 2011 at 2:26 am #

          tldnr

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    • garbob December 6, 2011 at 8:47 pm #

      yup.

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  5. Narc November 3, 2011 at 10:22 am #

    FWIW, a lot of people had negative reactions about the Black Diamond/Gregory deal as well but I think thus far those fears have not come to fruition.

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    • Dave November 3, 2011 at 12:39 pm #

      The results of that deal will take a couple years to materialize.  The first step was to move all their production to China so they could show a better profit margin to attract investors. The stuff coming down the pipe now is the old BD.  Pretty soon we will all have magnetic biners!

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    • Aaron Schneider November 3, 2011 at 7:09 pm #

      I’ve heard people hating on the newer black diamond pads, don’t know if that has anything to do with Clarus . . .

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      • Narc November 4, 2011 at 10:24 am #

        I think people have been hating on the BD pads for longer but I could be mistaken

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  6. Mike November 3, 2011 at 10:38 am #

    I’m just curious if the signs of this were long coming. i.e. 5.10′s quick move between shoe’s, quickly discontinuing shoes and creating new ones. Maybe indicative of 5.10 trying to find more of a market for their shoes?

    Just curious if this fits in with their difficulty on settling on a selection of shoes. I can’t even keep up with the shoes that are discontinued and the new ones that seem to come out so frequently from 5.10.

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    • lstefurak November 3, 2011 at 11:07 am #

      Agreed. I was/am really psyched for the SuperMocc. Now i hear 5.10 is going to discontinue them after 1 year… WHY?

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  7. Crimpin' Ain't Easy November 3, 2011 at 11:07 am #

    I hope this means Dave Graham’s gettin’ a raise…

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  8. Dave McAllister November 3, 2011 at 11:29 am #

    This is probably a very good thing for Five Ten, offering some stability and a MUCH thicker wallet for R&D.  I’m not 100% positive about this, but Adidas used to own Arc’teryx, although it was sold to Amer Sports a while ago.  The only complaints about AT is the price, I’d wager.  They lost no value but rather gained the R&D dough and facilities and support of a much larger and more successful company.  That can only be a boon to a very small company like Five Ten. 

    Also, Columbia Sportswear, that company of fishing vests and zip-off pants — ALL MUST BE BEIGE!! — owns Mountain Hardwear.  Their product line remains top of the line and innovative, especially with hard goods.  Columbia doesn’t mess with their design or their creativity…they just take a clip off the top and make sure Mtn. HW remains solvent.

    I’m stoked for Five Ten.  I mean, the outdoor industry is a lot like college football.  Conferences are always re-shifting and re-aligning.  It’s been this way forever.  And I think this can only help in time-lines for shoe release (won’t go away so quickly if not immediately successful), a broadening of materials and technology available, and wider distribution.

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  9. SupeDupe November 3, 2011 at 11:42 am #

    Nice reporting here, Narc. This is definitely an interesting development. The last 10 years have seen climbing injected with a TON of dollars. I just hope the sport can hold true to its roots and maintain its integrity.

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  10. a real climber November 3, 2011 at 12:06 pm #

    people saying 25 mil is low? and talking about shoes? really people this is what you care about? this hands down must be the worst thing to ever happen in climbing! five ten is a joke. climbing is a lifestyle not a damn sport. think of where this will lead us? BAN FIVE TEN or support corporate greed this is a joke people. you should all be worried about our dear industry its going all down hill from here….

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    • Scott Strong November 3, 2011 at 1:19 pm #

      It’s pretty hard to deny the fact that rock climbing has been and will continue to be a lifestyle. But it’s also very hard to deny the growth of climbing as a competitive sport worldwide.  USA Climbing, IFSC, they’re both gaining steam.  Rock climbing is on the short list to become an Olympic event.  Competitions are sport, the Olympics are a showcase of sporting events.  For a multi-national sports apparel company to not recognize this and not attempt to capitalize on it before, or at least explore to see if there is a market there, is kind of foolish.  Adidas has made it clear they want into the outdoor retail market and have sponsored Sasha DiGulian.  Adidas Outdoor already sponsors the Huber Brothers.  I’m pretty sure that those guys are athletes and real climbers.

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    • Dave McAllister November 3, 2011 at 4:37 pm #

      This must be a joke post…

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      • a real climber November 3, 2011 at 10:14 pm #

        far from a joke man! only joke around here is fiveten. i dont know what makes you think my post would be a joke….i mean what i said and firmly stand behind that. ill go hella out of my way to make sure no one supports that garbage

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        • TheDanDan November 4, 2011 at 6:53 pm #

          What, exactly, are you standing behind? A vague belief that large companies are bad? 

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  11. jugular levitation November 3, 2011 at 12:40 pm #

    Very interesting, however, I doubt they are buying it in cash…

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    • Dan Neufeld November 3, 2011 at 2:04 pm #

      No, it’s cash. You should see the size of the briefcase.

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  12. Scott Strong November 3, 2011 at 1:14 pm #

    Oooooooooooohhhhhhhhh!  If Five Ten plans to move production back Stateside, hopefully adidas has that as a checkbox in their performance metrics.  This could turn out to be a really positive thing for rock climbing.

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    • wildside November 3, 2011 at 11:07 pm #

      Both Five 10 and evolv already have significant aspects of their production based in California

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  13. eric November 3, 2011 at 1:31 pm #

    Isn’t Arcteryx also owned by the Addidas group? 

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  14. eric November 3, 2011 at 1:39 pm #

    Oh never mind. In 2005 Amer Sports group bought Salomon sports from Addidas. Salomon still owns Arcteryx. 

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  15. Neil November 3, 2011 at 1:41 pm #

    It seems that for a very long time, climbing had been a grassroots, bottom-up, athletic lifestyle–with businesses like 5.10 being an almost incidental byproduct of the lifestyle to support the athletes and lifestyle. These acquisitions are gradually changing climbing into a top-down, corporate controlled business, where the athletes (and poseurs) will be farmed to support the business. From lifestyle to just style…like surfing has become. When investment firms, boards of directors, corporate officers, marketers and multimillion dollar advertising firms start making decisions about the future and direction of climbing, you can bet that, even if the product doesn’t change, almost everything else will. The result: an increasingly less-friendly, less-personable, less authentic “lifestyle.” Five to 10 years from now, half of us will all be running out to get the new Nike StoopidSticky 6.0s. Because that’ll be the style.

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    • TheDanDan November 4, 2011 at 6:59 pm #

      Oh please . . . there’s nothing keeping you from enjoying climbing. Talking about ‘poseurs’ and complaining about the loss of your ‘lifestyle’ . . . sheesh. Do what you like and quit worrying about everyone else.

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  16. wildside November 3, 2011 at 5:37 pm #

    No one outside the inner circle knows the details of the deal. A stated 25 million payout could be spread over many years and have a multitude of conditions tied to it. It is possible that the sellers could see only a fraction of this money in the long run.

    25 million USD actually seems like too much to pay for a company that had only 16 million euros (about 22 million USD) in turnover last year. Who knows how much debt comes with the deal as well. But I agree with posters above that this is small potatoes for Adi.

    History says that acquisitions like this rarely go well – Mountain Hardware was an exception because the founders (who were a LEGIT management team) stayed on and managed the company for many years. Columbia also bought Montrail and if you believe what insiders say, they managed to cut sales in half and stripped away the culture and the core product from that brand. Predictions I have heard say that the current managers at 5.10 will get shelled out by the Adi execs in six months.

    I don’t think anyone can guess what will happen, but get used to the idea that every core company you love in climbing and outdoors will either eventually go out of business or get sold to another larger company.

    For sure Adi comes from markets where new products have to come along every season. Rock shoes are one of the few product lines that have escaped this – look at some of the big three’s models (Sportiva, evolv and 5.10) and they have been in their lines for years. Adi could change that strategy out of hubris or ignorance to the climbing market – or remake the market. They have the capital to do that. Or they could just kill rocks shoes and focus on bike shoes, lifestyle and hiking.

    Remember, you have the choice to just enjoy the sport. All you have to do is stop reading about stuff like this and go climbing.

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  17. John November 3, 2011 at 5:52 pm #

    Great…Pretty soon goddamn Footlocker will be selling 5.10′s and Mad Rock harnesses.

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    • TheDanDan November 4, 2011 at 6:56 pm #

      Oh no! How terrible!

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  18. Wernda November 3, 2011 at 10:39 pm #

    If family owned/operated is important, try La Sportiva! 

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    • Paul November 5, 2011 at 1:06 am #

      Plus they make better shoes… :p

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  19. wildside November 3, 2011 at 11:05 pm #

    Or evolv, it is owned by the two guys who started it.

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  20. Bill1256 November 4, 2011 at 12:15 am #

     wildside, I agree. Who knows what the ultimate price will be. At 22 million in sales and a 10%(probably generous) profit margin, 2.2 million in profit, they are paying 10 times earnings, an unheard of multiple. They must have a huge growth curve built in, like 35% a year, to possibly get to enough profit to have a reasonable multiple of 4 to 6 times earnings. Or, they could reduce overhead enough and add to profit that way  by eliminating staff that is already in place at Adidas. I would be curious to know how much they put down on this deal, my guess is under 10 million, and the earn out will determine the rest.

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  21. crimpy November 4, 2011 at 8:21 am #

    More applause for Josh helke, keeping it real….no sellout!

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  22. Spro1 November 5, 2011 at 12:14 pm #

    What is with all this discussion about Adidas buying 5.10 being the end of climbing? I am about as anti-corporate as it comes, but is this really surprising? Over the last 20 years, climbing has grown exponentially, fueled by the emergence of bouldering, hundreds of thousands of bolted, easily accessible routes, and now talk about the Olympics. Was that demand going to be supplied by ma and pa shops, or traveling vans making gear on demand, Chouinard style?

    I think there is a common thought in climbing that somehow being a climber is a higher form of being. Scraping for funds, living out of a truck and doing nothing other than climbing all day, every day gives someone a better perspective on life and being, something that is superior to the corporate and “standard” way of life that others live. Now, when climbing sees corporate involvement in what most would consider necessary equipment, that belief feels less secure and the ego tightens. At least that is the way I feel, and coming to grips with that reality is kind of awkward as I pack to head out to boulder for the day.

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    • Ex Climber November 8, 2011 at 1:48 pm #

      “I think there is a common thought in climbing that somehow being a
      climber is a higher form of being. Scraping for funds, living out of a
      truck and doing nothing other than climbing all day, every day gives
      someone a better perspective on life and being, something that is
      superior”

      This is the reason I find most climbers insufferable, and frankly, detrimental to the climbing experience.

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  23. Hueftle November 15, 2011 at 9:45 am #

    Another article discussing the issue: Climbfind Heroes – Try-It-Out Tuesday: New Attitudes On Mainstream & Why the Adidas, Five Ten Acquisition Is A Good Thing.

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    • jackie November 15, 2011 at 9:48 am #

      well, i’m finding this disqus thing a bit buggy…  let’s try that again - Climbfind Heroes – Try-It-Out Tuesday: New Attitudes On Mainstream & Why the Adidas, Five Ten Acquisition Is A Good Thing.

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      • Hueftle November 15, 2011 at 9:53 am #

        ok. well this sucks.  if you wanna read it it’s at heroes.climbfind.com, scroll down.  good talk.

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Trackbacks/Pingbacks

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