Adidas Buys Runtastic As FitBit Shares Slump Despite Massive Growth
The move comes as Fitbit reports that sales were up 205% profit margins went from 41% to 51%.
Fitbit also reported it had sold 4.5 million wearable fitness devices in the quarter, up from 1.72 million in the year-earlier period, despite the stellar result shares in the Company who have recently listed in the USA crashed 14% last night.
The health-tracking device maker reported its earnings Wednesday after the bell, and posted quarterly revenues that were the highest of its eight-year history, CEO James Park said in a press release.
Now Adidas who normally competes with tha Apple linked Nike is set to take on FitBit in the fast growing health and fitness market.
The world’s second-largest sporting goods company, which claims it was the “first in the industry to comprehensively bring data analytics to the athlete,” hopes the acquisition will pump up interest in its brands and turn some of Runtastic’s 70 million users into Adidas footwear and apparel shoppers.
“There is no doubt that the digital world is conquering our industry,” Chief Executive Herbert Hainer said last night “Just looking at Runtastic numbers gives a decent impression of how many consumers one can attract.”
Runtastic was founded in 2009 in Pasching, Austria, and entered the fitness app movement early. It now offers more than 20 fitness, health and endurance apps, including Leg Trainer, Six Pack, and Sleep Better, which tracks sleeping patterns. It also recently branched into hardware.
Adidas isn’t the only sportswear maker betting apps will inspire enthusiasm for its products. The purchase comes only a few months after its rival Under Armour invested $710 million in its Connected Fitness platform.
The platform consists of health and fitness app companies MapMyFitness, which Under Armour acquired in 2013, and Endomondo, and MyFitnessPal, which it bought in early 2015. MyFitnessPal cost $475 million and was Under Armour’s biggest acquisition.
Under Armour has also invested in a relationship with smartphone maker HTC.
Nike Adidas’s most formidable competitor, has been a pioneer in fitness tracking, and teamed up with Apple early on. People who use the Nike+ Fuel app can track their fitness on the most recent iPhone.
Adidas said Runtastic will continue to operate as an independent business unit, and all its four co-founders will stay on board for at least three years.