Adidas, stung by the loss of several major clothing contracts, laid off dozens of people this week at its apparel manufacturing plant near the intersection of Interstate 70 and Post Road on the city’s east side.
Adidas spokeswoman Maria Culp told IBJ in an email that “about 40 people are impacted” by the layoffs.
But two Adidas employees at the plant told IBJ the number was greater than that, with one putting the total near 70. They said the layoffs included two entire design teams and some production arts positions and affected management and hourly positions. Some of the workers laid off, the employees said, had worked at the plant for more than a decade.
"Decisions that impact our people’s lives are never easy, and we’re working to make sure our people are supported during this transition," Culp said.
Terminated employees told IBJ they have been given compensation packages and also are receiving assistance in finding new jobs.
Culp told IBJ the plant, which employs more than 1,000 people, will continue operations. “We want our Indy facility to be a state-of-the-art global operations facility and will continue to invest there.”
Sources close to the company told IBJ that Adidas executives from Germany plan to visit the local plant next week to evaluate its manufacturing and silk-screening operation.
The 46-year-old facility has weathered some rough times recently.
In 2012, after an 11-year run, Adidas lost its huge NFL apparel contract to Nike. Industry analysts estimated the local facility—which company officials said in 2015 was the largest of its three U.S. plants—generated at least $200 million in annual revenue from the NFL deal.
Following last season, Adidas ended an 11-year-run as uniform and clothing provider for the NBA. Nike picked up that contract, agreeing to pay the league $1 billion for an eight-year deal. Industry experts estimated that, after the NFL exit, the NBA contract accounted for one-fourth of the local plant’s business.
In 2014, Adidas also lost several major college accounts, including the universities of Notre Dame and Tennessee. In early 2014, ESPN reported that Notre Dame and Under Armour agreed to the most valuable shoe and apparel contract in college sports history.
Adidas announced in 2016 it agreed to sell its Mitchell & Ness business to a newly formed entity primarily owned by Juggernaut Capital Partners. Mitchell & Ness has licensing agreements with the NBA, NHL, Major League Baseball and NFL to sell primarily vintage apparel and uniforms.
“Over the past few years, we have made strategic business decisions to divest in Mitchell & Ness and the NBA licensed business to better align with our company’s vision,” Culp said.. “As we continue to grow our business in America, we have made the decision to integrate our licensed business into our wider organization. This means we have to make strategic changes in our operations."
Adidas still has contracts to make uniforms and apparel for Major League Soccer and authentic uniforms for the National Hockey League as well as a number of colleges. Industry experts said the local plant will likely be used to make those items, as well as Adidas-branded apparel.
The plant has a long history here. It was founded in 1971 by Thomas Shine under the Logo 7 banner to manufacture sports apparel.
Mall pioneers Herb and Mel Simon bought the operation in 1984, just after purchasing the Indiana Pacers. In 1992, when the Simons sold Logo 7 to Virginia-based Tultex Corp., the company employed about 500.
In 1997, as employment at the plant grew to more than 900, the operation changed its name to Logo Athletic.
In 1998, a local group headed by Shine, the Simon brothers and the Indianapolis Motor Speedway bought the company back from Tultex. But just two years later, Logo Athletic declared bankruptcy during a free fall in the sporting apparel industry.
In 2001, Reebok bought the operation for a fire-sale price of $13.8 million—$83 million less than what it sold for three years earlier—and used the facility to produce much of its NFL-related merchandise.
The plant became a part of Adidas when the German company bought Reebok in 2006 for $3.8 billion.