Financial Accounting: IFRS, 3rd Edition

CHAPTER 11 Corporations: Organization, Share Transactions, Dividends, and Retained Earnings

FEATURE STORY

To the Victor Go the Spoils

You never know where a humble start might take you. One of the most recognized brands in the world began in 1924 when Adolf “Adi” Dassler became committed to the idea of providing high-quality, sport-specific shoes to athletes. He and his brother stitched together canvas and whatever else he could find in post-World War I Germany to create his shoes. They were so dedicated to their company that they sometimes ran their equipment with electricity generated by riding an exercise bicycle.

Just like today, success in the early years of the Dassler Brothers Shoe Company hinged on affiliations with famous athletes. So it was very fortunate for the brothers that in the 1936 Olympics, their shoes were worn by the famous African-American runner Jesse Owens. After World War II, as a result of a family quarrel, Adi’s brother left and formed his own shoe company, Puma (DEU). Adi renamed his company using a combination of his nickname “Adi” and the first part of his last name, Dassler, to create the now famous name adidas (DEU). In the 1990s, adidas became a publicly traded company for the first time when its shares began to trade on both German and French exchanges.

By becoming a public company, adidas increased its ability to raise funds. It would need these funds in order to compete in the increasingly competitive world of sports apparel. Within two years ...