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adidas AG is a global producer of sportswear and sports equipment. The Company offers its products through three main brands. The adidas brand covers footwear, apparel and hardware in two segments: the Sport Performance segment develops modern products, focusing on running, football, basketball, tennis and training, for performance athletes, and the Sport Style segment is aimed at fashion-conscious consumers and is comprised of the Y-3 collection. The Reebok brand covers sports and lifestyle products in three segments: the Reebok segment offers footwear and apparel for men and women for sports and street, as well as hardware, such as bags and balls; the Reebok-CCM Hockey segment provides hockey equipment and apparel, and the Rockport segment offers dress, casual and outdoor footwear, and accessories. The TaylorMade-adidas Golf brand covers a range of golf clubs, accessories, footwear and apparel, marketed under the brand names TaylorMade, adidas Golf and Ashworth.

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Business Segments

The Adidas Group organizes its business segments by brand:

* adidas (72.5% of 2008 net sales): The adidas brand is the ultimate profit driver for the adidas Group, accounting for 72.5% of all group sales in 2008. The brand, which was restructured during 2007, now consists of 2 segments: Sports Performance (80% of brand sales in 2008) and Sports Style (20%). The adidas segment has seen its revenues grow to €7.8 billion in 2008 from €7.1 billion in 2007. This brand, which employs a premium-price strategy, is the root of the group's strength in Europe, with the brand generating 50% of all its sales there in 2008. In addition to selling its products to retailers, the brand has 1332 own-retail stores worldwide, included 329 new stores opened in 2008.

* Reebok (19.9% of 2008 net sales): Reebok has three different divisions: Reebok (80% of brand revenue in 2008), Reebok-CCM Hockey (9%), and Rockport (11%). The brand also contributes to the group's strength in Europe, where it makes 32% of its sales. Since being acquired in 2006, the group has been trying to reposition the Reebok brand image. Before its acquisition, Reebok had employed excessive discounting in an effort to drive volume sales, but the adidas Group has been raising prices. The group is also trying to position the brand as a specialist in the women's and running markets. Success has been limited. Reebok's sales have fallen from €2.33 billion in 2007 to €2.15 billion in 2008 and the segment recorded a loss of €7 million in 2008, from a profit of €109 million the year prior, due to clearance sales in the second half of the year and increased operating expenses. Overall, Reebok's brand image is still diluted because of its previously low prices. Most analysts believe that a Reebok integration and shift in brand image are significant opportunities for the adidas Group.

* TaylorMade-adidas Golf (7.5% of 2008 net sales): TaylorMade-adidas Golf is comprised of TaylorMade (clubs and balls) and adidas Golf, (footwear and apparel). Golf clubs and accessories accounted for 71% of the segment's sales in 2008, with the remaining 29% from footwear and apparel sales. TaylorMade-adidas Golf generated $812 million in 2008 net sales, 50% of which came from the North American market. Revenues over the last three years have fluctuated. This can partly be attributed to the divestiture of the Greg Norman Collection (GNC) in November 2006. In 2006, GNC contributed $79 million of sales to TaylorMade-adidas Golf.

Christian Dior SA is a France-based holding company that specializes in the production and distribution of consumer goods. The Company has six principal product lines: haute couture, which is marketed under the Christian Dior brand; wines and spirits, including the Moet&Chandon, Veuve Clicquot and Hennessy brands; fashion and leather goods, comprising the Louis Vuitton, Fendi, Celine and Givenchy brands; perfumes and cosmetics, including the Guerlain, Kenzo and Christian Dior brands; watches and jewelry, comprising the TAG Heuer, Chaumet and Zenith brands, and selective retailing, such as the Sephora, DFS and Le Bon Marche brands. Christian Dior SA operates through three companies: Christian Dior Couture (100%-owned), Financiere Jean Goujon (100%-owned) and LVMH (42,4%-owned). The Company markets and distributes its products through the Company-owned shops and licensed distributors in Europe, the United States, Japan and Asia Pacific.

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