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Review: 'Sneaker Wars,' by Barbara Smit

BY MARK CLOTHIER | Bloomberg News

May 4, 2008

SNEAKER WARS: The Enemy Brothers Who Founded Adidas and Puma and the Family Feud That Forever Changed the Business of Sport, by Barbara Smit. Ecco, 383 pp., $26.95.

Two of the greatest brands in sports, Adidas and Puma, grew out of one small town in Bavarian Germany, founded by competing brothers, Adolf and Rudolf Dassler.

Barbara Smit's "Sneaker Wars" tells how the Dassler boys started making shoes in their mother's laundry room in Herzogenaurach after World War I. It traces the growth of the business and its fraternal split into Adidas and Puma, exacerbated by World War II, jealousy and suspicion.

The first 50 years of the 90-year story, capturing the start, splinter and competitive rise, are the book's gem. Those early decades show the evolution of the company and amateur sports before both were altered (corrupted?) by bankers and greed.

Adi began as a tinkerer-craftsman using tools left by retreating World War I soldiers. Some of the first shoe-leather was scavenged from their helmets and bread pouches. Rudi, the charismatic salesman, joined his brother in 1923. By the mid-1930s, the Dasslers had a thriving business, buoyed by Adolf Hitler's fascination with sports as a promotional tool for his world view.

World War II drove a wedge between the brothers. It was fueled by envy over Adi's exemption from military service and Rudi's conscription, which he blamed on his brother. Soon after the war they moved to opposite sides of the Aurach river. Adi formed Adidas, merging first and last names. Rudi chose Ruda first, then settled on Puma.

The most successful athletes now are a bit like corporations, and, as Smit shows, the Dasslers are partly to blame. Things were relatively pure in 1936, when Adi showed up at the Berlin Olympics with a pair of handmade spikes, found Jesse Owens and persuaded him to run in them. The sight of Owens on the medal stand in Dassler gear helped make the brand among athletes.

As recently as the Melbourne Olympics in 1956, Adidas' main marketing expense was sending Adi's son, Horst, to give away shoes. At Rome in 1960, Puma upped the ante, quietly offering 10,000 German marks to lure sprinter Armin Hary into its spikes.

By the 1980s, both brands were losing market share in the U.S. to Reebok and Nike. That trend worsened when Nike signed basketball player Michael Jordan, who grew up an "Adidas nut," Smit writes. Nike won Jordan over by offering to create his own shoe. Nike sold more than $100 million worth of Air Jordans in their first year.

Eventually, both companies bought out their U.S. distributors to simplify their structure and gain control over marketing. Adidas had to pay more than $120 million to win back distribution rights that Adi had granted with a handshake.

Puma's struggles were exacerbated by weighty endorsements and sluggish sales that found the once-premium brand peddling its shoes at U.S. discounters like Kmart.

From there things worsened. Deutsche Bank seized control of Puma rather than let the German icon go under. It was sold in 1989. Rudi's heirs walked away with $10.6 million between them.

Three years after Horst died in 1987, his sisters took note of what happened across the river and sold the company to Frenchman Bernard Tapie. The daughters of Adi Dassler had one final request before signing the sale agreement - they wanted to keep their 20 percent discount at Adidas stores.