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Business

World Cup Dreaming in Herzogenaurach

The biggest winner at this year's World Cup in South Korea and Japan could be Germany's most recognizeable sports brands.

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Foot soldiers in the shoe war

At some point during this summer’s World Cup, the tiny Bavarian town of Herzogenaurach could find itself fighting over who to root for.

Will it be Cameroon, with their dynamic new Puma sleeveless jerseys, or the Adidas-outfitted superstars of France and their ball magician and Adidas darling Zinedine Zidane?

It most likely won't matter. Both companies look to gain in June’s World Cup in South Korea and Japan. And that means good news for tiny Herzogenaurach, where the two competitors have had their headquarters since 1948.

The brothers Rudolph and Adolph "Adi" Dassler actually grounded their shoe company together in the 1920s. But after a bitter fight in 1948, the brothers parted ways. Rudolph left to set up Puma and Adolph renamed his company Adidas and Rudolph has been playing catch up ever since.

A competitive family

Adidas has long been Europe’s largest sporting goods producer and ranks just behind Nike worldwide. The 6.1 billion euro profits the company netted last year dwarfed Puma’s 462 million euro. And last year’s figures show Adidas growing in North America, the sporting goods world’s most important market.

Still, Puma has been leaping ahead in recent years. Since wunderkind CEO Jochen Zeitz took control in 1993, the company’s profits have shown steady increases. In the first quarter of this year, Puma netted a 56 percent increase in sales and its share prices continues to soar in the double digit percentages.

it doesn't look to stop any time soon.

The World Cup is a huge stage for both companies. With each investing less and less in marketing during the past year’s worldwide economic slump, the advertising value gained from the mega-sports event spread across two countries – both important markets – can’t be underestimated.

Adidas ball vs. Puma shoe

In response, both companies have chosen the World Cup to debut cutting edge shoes and jerseys they hope will worn on soccer pitches from Okinawa to San Jose.

Puma, which sees itself as the feisty underdog to the "ladies and gentlemen with the three stripes," as their spokesman puts it, will be well-represented by Cup contender Cameroon and their unique sleeveless jerseys. The team is one of four Puma is sponsoring in the World Cup.

Around 50 percent of Puma’s profits come from their soccer shoe division, so the company has made sure to design a special World Cup shoe that it hopes becomes a best seller long after the last fans fly out of Seoul or Tokyo. Shudoh even sounds Asian, a lucrative region both Puma and Adidas are eager to storm.

Shudoh also consoles Puma execs with the fact that, though the official World Cup ball may be a garishly colored Adidas creation, it will, at the very least, be kicked by a Puma-fitted foot on occasion.

An all-Adidas final?

But it's a small consolation in an otherwise Adidas-dominated Cup. The worldwide number is the official licenser, outfitter and sponsor of the 2002 Cup. Around 40,000 World Cup employees will be outfitted in the three stripes, as will 10 teams – among them finalist favorites France and Argentina as well as Germany.

The company is spending 40 million euro on marketing, a figure that execs have already forecast will take a bite out of this year’s profits. But the bite will be tolerable if history is any indication.

Following France’s victory in the 1998 World Cup – in Adidas shoes and jerseys – the company replaced Nike as leading sporting goods company in France. Puma also experienced a run on its shoes following the Cup.

The numbers prove that, France and Cameroon aside, the loudest cheering this World Cup will most likely come from a Bavarian town smaller than the world tournament's average gametime crowd.

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