Following are excerpts from a CNBC interview with Kasper Rorsted, CEO of Adidas, from the World Economic Forum 2017 with Julia Chatterley
JC: We're going to kick off the show here in Davos, to talking Adidas, their new CEO Kasper Rorsted has promised to make conquering the US market his top priority, Adidas reporting strong US sales growth in recent quarters, but it still lags behind Nike in terms of market share. I'm pleased to say the CEO of Adidas joins us now, Kasper, great to have you on the show. As I mentioned, conquering the US market one of your top priorities here. How concerned, how optimistic are you by the prospect of a United States run by President Elect Donald Trump here, and what's this going to mean for the US consumer?
KR: So overall for our business in the US I am extremely optimistic. We grew more than 30% in the first nine months. I don't think that the new President will do anything to prevent our growth, I think the consumers will demand the products, and we see a huge opportunity in our product line, but also through the conversion into a much more digital marketing environment. So actually, at this stage, I'm very, very optimistic when it comes to the US, and I think that we have a great ride ahead of us.
JC: So what about the prospect of an import tax? Because this is now being talked about, what would that mean for your business?
KR: I think you need to look upon it in the context of the overall industry, and the industry is completely similar constructed. So it will have the same impact on everybody. So I don't think, for us, it will have any particular impact. If a, you know, import duty will come, it will hurt the entire industry. But I do believe Mr. Trump is a businessman, and I don't think that it is in his interest to punish consumers for buying the right products in the US markets, and also those of our competitors.
JC: So what does that mean? You think he actually isn't going to do a border tax?
KR: I don't think he's going to, I do not think so, and I will also say the following: I think it's important, as a CEO, that you deal with the problems when they arise, and not through rhetoric, and right now we are assuming that the market will continue as it is.
JC: So you think we're still getting campaigning Donald Trump, rather than a future President, in terms of the things he's talking about?
KR: I think we'll deal with it when it gets here, and right now, if you ask me is that one of my concerns, it's actually not one of my concerns at this stage.
JC: Do you think he's going to cut corporation tax? Because this is one of the other promises he's made, and it's one finances the other, or at least in part.
KR: I think that is one of the things that the US parties have been discussing over many, many years, and I think it's more than due, so I hope that he will do it. Because I think it will have a huge positive impact on the US economy, if the US corporations could get money back into the US that's right now sitting outside the US. So it would be very good for the US consumer, and thereby also Adidas.
JC: Do you think he's being protectionist, though? Because we've spent a lot of time talking about Donald Trump being protectionist, and Xi Jinping coming in here and saying he's going to be a globalization promoter here, but if you look at what's going on in the world, when these trade deals were signed, a long time ago, the US had 60-70% of world GDP. Now they have 20%, and you've got guys here who back Donald Trump saying there's an asymmetry now, and actually these kind of tariffs applied would just bring symmetry. Would you agree with that?
KR: I heard the dialogue yesterday from his Head of Strategy-,
JC: Scaramucci, yes.
KR: Who I thought was a very well-articulated young man. You know, I don't know the details of that and I think it's in every country's interest to try and get the best possible deals, but I do want to just come back to the core of it. I think that we have been in a pre-election, or election time, and we're getting to a Presidential time, and I think you'll see what's coming in the Presidential time, but what I do think is striking is that yesterday, you know, the President of China gave a brilliant speech, but he also gave a brilliant speech in the absence of western leaders actually here in Davos, and that was, for me, one of the most striking, you know, I would say experiences of my 10 years in Davos, the absence of western leaders and also how the Chinese captured that space.
JC: Is that an embarrassment, actually, that western leaders stayed away? Because shouldn't they be here and go, 'Okay, we've maybe got some things wrong, we got a reality check this year, but now we're going to focus on fixing it'?
KR: I think it's important that Europe gets its act together, and I don't think you do that by being absent, but I think it was symptomatic, what happened that they were not here. So I've seen two things the first two days, one was the political absence of the west and the dominance or the driver of the east. And the second part is, which I think is very apparent in the entire programme, is the true impact of digitalization on society and on businesses like Adidas.
JC: And on jobs. Do you think when Xi Jinping talks about globalization, though, he really means it? Because for all the talk about what he hopes to be, and what the country is, the reality back home is still very different, and he's got a long way to go. Do you believe they're going to make those steps?
KR: Over time I do, but I think you need to put it in the context of the Chinese economy. The Chinese economy is growing 6-6.5%, but going through a tremendous transformation from being a manufacturing based economy to being a service based economy. So I do think he believes that, and by the way, we still benefit greatly as a company from the Chinese market.
JC: So you just mentioned, and we were just talking about, a speech that was made yesterday, or a talk by Anthony Scaramucci, who is the Public Policy Expert now for Donald Trump, and he was changing up and giving a softer appeal to some of the comments that Donald Trump has made. If I contrast what we've had from Donald Trump and what we got from Xi Jinping, is China winning the PR battle at this moment, if we look at what could come over the next 12 months, in terms of a rhetoric war over trade?
KR: I think if you look at the bigger context and realize there's more than two countries in the world, I think China is filling the gap right now in Davos that is not being filled, by the absence of western leaders across the board. Kerry is the only one who's been here, all the-, you know, UK, France, Germany and Italy are not very present here, and I think that China is filling that gap at this stage, which I don't think, long-term, is in the interest of the West.
JC: I want to ask you, very quickly, about the company, as well, before we run out of time. We mentioned Nike as we introduced you, and the challenge you've got tackling them. You've also got Under Armor. Now, fine, that's in the foreign markets, but Under Armor also came to the German market, sponsoring a very well-known football team, and got a lot of coverage. How do you fight back, with Under Armor coming to the German market?
KR: I think you need to put it into the context of the bigger picture. We are about five times bigger than Under Armor. We respect-,
JC: For now.
KR: We respect them as a competitor. We have had by far the highest growth rate in the industry this year, so we are-, we believe very strongly, with the products that we have, with the heat our brand has right now has, and the growth we're getting in the US, that we are very well positioned to have a very ride for long-term.
JC: So you're saying bring it on? If they-,
KR: We are ready to fight.
JC: You're ready to fight. Sir, thank you so much, some great comments, as well, I think, about leadership here. Kasper Rorsted, who is the CEO of Adidas.