Adidas vs Puma: The Story of the Dassler Brothers

When looking at the world of business, there are several historic rivalries that have played out throughout the years. Coca-Cola vs Pepsi, Airbus vs Boeing, and the list goes on. However, none of these rivalries comes close to that of Adidas and Puma. Founded by two brothers in the same small German town, the history of these two iconic brands is on one hand filled with technological innovation, world records, and gold medals. But on the other hand, it is also a tale of betrayal and a family feud stretching over generations, a divided town, and relentless competition to reach the top.

• Adi and Rudi Dassler: The two brothers who would go on to found Adidas and Puma were first in business together.

• Family Feud: How the two went from brothers to bitter rivals in the span of a few years.

• The founding of Adidas and Puma: The backstory on how the two brothers went their separate ways and how each started a successful company.

• A town divided: Both companies started their operations in the small town of Herzogenaurach, and the rivalry between the two companies.

• The sneaker wars: The fight for domination in the industry and the strategies employed by both companies. Adidas and Puma chose different marketing strategies and constantly fought against one another.

• The legacy: The impact of Rudi and Adi Dassler, and the companies they left behind after their deaths.

The two Dassler Brothers, Rudolf and Adolf (or Rudi and Adi as they were almost always called) were born to a cobbler in the small Bavarian town of Herzogenaurach in 1898 and 1900 respectively. Our telling of the story is going to start some twenty years later as Germany and the rest of Europe are dealing with the fallout of the First World War. Both Dassler brothers had spent time at the front in Flanders during the war and were just 18 and 20 years old when the war ended.

Our story, and in many ways the story of Adidas and Puma, begins just after the peace treaty of Versailles was signed and the continent could begin to pick up the pieces after the bloody conflict. This is also, quite literally, what Adi would go on to do. He scoured battlefields after the guns and artillery had been silenced, and looked for old scraps of leather and pieces of uniforms to be used for his business idea. Adi had been a keen athlete in his younger years, and his vision was to develop a shoe for runners that was both durable and light, something which was more or less unheard of at the time. With this new type of shoe, the younger of the two Dassler brothers envisioned a future in which he could build a thriving business, and in effect, a better life for himself and his loved ones.

It didn't take long until Adi had developed his first model of athletic shoes, and just a few years after the war had ended he had set up his operation in the outskirts of Herzogenaurach. The enterprise went well, and in 1924 his brother quit his job as a police officer and the two of them jointly started The Gebrüder Dassler Schuhfabrik (The Dassler Brothers Shoe Factory). However, calling this a factory was a bit of a stretch. The two brothers produced football and track-and-field spike shoes out of a washroom they had converted into a makeshift manufacturing facility. The washroom was of a decent size, but as electricity was still rationed in Germany the brothers had to generate their own electricity by pedaling a stationary bike. The shoes quickly became popular, and soon enough they found a small warehouse where they could scale up their operations.

It was also during this time that the major breakthrough would come for the two brothers' family business. The shoes they made were some of the best on the market, and the German Olympic coach at the time quickly took a liking to the brother's products. Before long, the Dassler Brothers were supplying German athletes with spiked shoes, an innovation that became vital to the success of runners. Adi had always been the one who enjoyed sitting at his workbench, trying to come up with the best possible products for German Athletes to use, while Rudi was the one more interested in the business side of things and took care of sales and marketing. This proved to be a potent match, and while Adi developed groundbreaking new shoes used by track-and-field athletes in Germany, Rudi took care of the other aspects of the business.

However, Germany in the early 30s was changing rapidly, and a fascist leader with dictatorial ambitions had begun to make his moves in earnest. Adolf Hitler and the Nazis took power in 1933, and the same year both brothers joined the party. Here the story gets somewhat murky, but what is often reported is that both Adi and Rudi saw a golden business opportunity in the new fascist Germany. Hitler saw excellence in athletics as a way to promote Germany and the German people, and supplying athletes for the upcoming Berlin Olympics and the national football team would undeniably be a way for the company to show off its superior shoes. However, while Adi wanted his products to be used by the best in the world (working with the Nazis while doing so), Rudi is reported to have been a believer in the ideas of Nazism much more ardently. After the brothers' relationship broke down, and during the de-Nazification trials after the war, this is something that would become an area of contention as the brothers had to defend their actions during the war.

The Berlin Olympics in 1936 was seen by both brothers as a golden opportunity to gain international exposure. Naturally, all German athletes were wearing Dassler shoes, and several other countries were also supplied with them. However, none of these were as important as the legendary Jesse Owens. Adi had contacted Owens ahead of the games, and together they had developed pairs of spiked shoes that fit him perfectly. He would go on to dominate the 1936 Olympic games, winning four gold medals in the 100-meter dash, long jump, 200-meter, and 4x100 relay, and subsequently disproving Hitler's idea of “Aryan Supremacy”. Owens became a global superstar, and he did so while wearing shoes developed by Adi Dassler.

In the years leading up to the start of the war, the first signs of friction in the family started to rear its head. Adi and his wife moved into the family home, where the brother's parents, sister, Rudi, and his wife lived. This coupled with the fact that neither brother was particularly fond of the other's spouse and living in such a cramped space meant that arguments and disagreements were constant.

When Adolf Hitler and the German army invaded Poland and plunged Europe, and eventually the rest of the world into the deadliest war in history, the Dassler brothers were also plunged into the conflict. With all aspects of German society pivoting to supporting the war, the time of profiting from a boost in athletic competitions was at an end. Adi was drafted to become a radio operator in the Wehrmacht in 1940 but was dismissed and sent back to Herzogenaurach to continue to run the factory as he was deemed too important to the business. After Adi returned to the shoe factory, the company started producing military material as well as equipment for the fascist athletics movement.

Between 1939 and 1943 the family tensions only increased. Adi refused to hire the two sons of his sister, Marie, as he believed there was too much family involvement in the business already. Rudi was incredibly unhappy with this and was of the staunch belief that his brother was starting to take on far too much of a leadership role. Adi's unwillingness to employ his two nephews in turn led to them being drafted into the war, from which neither of them returned. But the event that is always referenced as the point of no return in the brothers' relationship came during an Allied bombing raid in early 1943.

Adi and his family, which now included three children, were taking cover in a nearby bomb shelter when Rudi, his wife, and their children entered the shelter. Just as they were entering, Adi uttered the exact phrase “Here come those swine-hounds again.” Friction between the two was already high and while Adi had made the comment in regards to the planes that were currently dropping bombs overhead, Rudi was convinced that the comment was made towards him and his family. A massive fight ensued and the two brothers stopped speaking to one another after that night in the bomb shelter. Shortly after, Rudi was drafted and sent to the eastern front and the shoe factory was ordered to start manufacturing Panzerfausts.

But by this point, it was obvious to everyone that Germany was going to lose the war. Rudi, keen to start his own business after the war wrote to his wife urging her to hide away leather from the factory to ensure he had material to start up production as soon as he returned home. However, his brother was one step ahead. Adi had begun making preparations for post-war operations by stashing vast quantities of leather to ensure that production could resume more or less immediately after the war. Upon learning this, Rudi became furious and reported him for treason to the local Nazi party, although nothing came of these allegations. Quite unhappy with his current situation and not too keen on facing down the advancing Red Army, Rudi deserted. He managed to make it all the way back to Nuremberg before being arrested and thrown into a Gestapo prison and was nearly sent to the Dachau concentration camp. However, the Allied advance was just in time and he was instead taken as a prisoner of war and sent to a Soviet work camp until returning back to Herzogenaurach in 1946.

As the Allies fought their way through Germany towards Munich and Berlin, the Americans were the first ones to arrive in Herzogenaurach. While resistance at this point was light or nonexistent, the U.S. was in most cases enacting a policy of destroying any factory or manufacturing site that had been a part of the German war machine. Here the sequence of events becomes hard to verify and it can't be for certain whether or not this actually happened, but what is often retold is what follows. When the American troops arrived at the Dassler brothers' facilities and aimed the gun barrels of their Sherman tanks at the factory, ready to blow it to smithereens, Adi's wife Käthe came rushing out of the adjacent house, violently flailing her arms and shouting at the troops to hold their fire. While the language barrier would have been severe, she managed to get her point across: the shoes that Jesse Owens wore during the 1936 Olympics in Berlin had been made in the building. While it had been converted to a munitions factory, she somehow managed to get her point across: this was a shoe factory first and foremost. It is unclear what exactly saved the factory: Käthe's pleading, the fact that a piece of American athletic history had been made there, or the commanding officer's belief that there was little tactical gain in destroying a shoe manufacturing site. One thing is for certain though: it survived the Allied advance, and Adi Dassler could continue making shoes after the war.

While both brothers had survived the war, their relationship was now beyond repair, and in the immediate aftermath and the Allied occupation of Germany, the wounds would become even deeper. After the war, the Allies held so-called de-Nazification trials, in which defendants had to answer for their actions during the war. As if the two brothers' relationship hadn't been strained enough before the war, the two testified against one another. Adi falsely accused his brother of having been a member of the Waffen-SS but accurately described his brothers' belief in Nazi ideology. Rudi on the other hand also testified against his brother, citing his deep involvement with the Hitler Youth. But while Rudi had nobody to come to his defense, the same can't be said for Adi. Several defending witnesses spoke up and clarified that Adi had never been interested in the politics of the Nazis and that his involvement with the Hitler Youth had merely been as an athletic instructor, steering clear of all rallies and ideological ideas. The key witness that most likely kept Adi out of an Allied prison camp was a previous mayor of Herzogenaurach who was half-Jewish. The mayor testified that Adi had given him a warning about an impending raid by the Gestapo, allowing the mayor and his family to go into hiding, almost certainly saving their lives. This coupled with the fact that he had closely collaborated with a black American to snub Hitler’s athletes of gold medals during “his” Olympics, convinced allied prosecutors that he had merely been a collaborator with the Nazis for his own gain rather than subscribing completely to their ideological ideas. Instead of being imprisoned, Adi Dassler was banned from owning and operating any type of business for a number of years.

Rudi on the other hand was convicted on Nazism and war charges and sent to an American prison camp. He was however released in 1948 due to the simple fact that the Allies were running out of room to house all people convicted following the end of the war, and Rudi was released and went back home to Herzogenaurach.

It was also here where the brothers split for good. Upon Rudi's return home, the two sat down and essentially conducted a divorce. The materials at the factory were split, deals were negotiated, and terms were decided. After the papers over who got what was signed well after midnight, the two said goodbye to one another, and in the middle of the night Rudi collected his things and his family and moved to the southern side of the river where he intended to set up his operations. While he got some equipment from the brothers' previous joint venture, he also took about 1/3 of the workers with him as well. Many of the shoe developers and product experts stayed with Adi, and most of the marketing and sales departments chose to move across the river with Rudi.

Puma was founded in the summer of 1948, with Adidas coming into existence roughly a year later when Adi was allowed to go into business again. In the same year as its founding, Adidas also registered a trademark for the now iconic three stripes. These initially acted as support to the overall structure of the shoe, but Adi realized there was a branding opportunity to be had here. He, according to the tale, bought the rights to use the stripes from a Finnish manufacturer for roughly 1,500 euros (adjusted for inflation) and two bottles of whiskey.

Quartr Pro is revolutionizing professional public market research

Request a personal demo to learn why Quartr Pro is quickly being adopted by leading asset managers, hedge funds, investor relations departments, and sell-side analysts worldwide.

• Request personal demo

During the early years, one thing seemed obvious: there was no way that a town the size of Herzogenaurach would be able to support two more or less identical companies with global ambitions. However, both companies survived and grew in the early years, and a clear leader emerged: Adidas. Adi Dassler's technical skill and passion led him to create some of the best football and track and field shoes in the world. Something that would help build the relationship for further growth in the future was the fact that Adidas became a supplier to the national team ahead of the 1954 World Cup, a tournament West Germany would go on to win. During the '50s and '60s, Adi came to be integrated into the national team organization oftentimes sitting on the bench during big games. Working closely with athletes and listening to their needs was incredibly important to him, and through collaboration, he was able to build the best shoes available on the market for any given sport.

Puma saw success but at a much slower pace than their rivals across the river. While seeing the three stripes on the shoes of footballers and runners breaking records and winning medals became the norm, Puma had far fewer athletes using their products compared to Adidas and was operating at a much smaller scale. The Adidas headquarters was growing and turning into a modern enterprise during the '60s, but much of the Puma operations were still stuck in the early ‘50s. Both companies produced both regular everyday sneakers as well as athletic shoes, but Adidas was much further ahead. One of the most significant statistics that can be used to illustrate the dominance of Adidas was the simple fact that in the '60s, they produced nearly four times as many shoes a day as Puma managed. However, those who believed that only one was going to be able to survive were all proved wrong. While far behind his brother, Rudi and Puma managed to build a thriving business. If it hadn't been for the fact that Adidas was larger, Puma could have considered itself a very successful company.

However, the rift between the companies was to become even more pronounced as football grew in popularity and it became clear that there was going to be a lot of money to be made. Due to Adi’s close involvement with the national team and Adidas positioning itself as “The Football Brand”, the brand with the three stripes came flying out of the starting blocks as football was growing into the biggest sport in the world during the 1960s. Whereas Adidas was oftentimes sponsoring entire teams, Puma still managed to put some good players under contract. The most important of these was Eusebio, one of the biggest stars of the 1960s. He scored the most goals in the 1966 World Cup, and in the year after Puma released the Puma King, with Eusebio being the new football shoes' poster boy.

The period between the founding of the two companies and the death of both brothers in the 1970s is oftentimes referred to as “The Sneaker Wars”. The two companies were constantly trying to outdo one another when releasing new models, and while commercial success was important, both brothers saw gold medals at events as the ultimate triumph over one another. During these years both Puma and Adidas employed teams of lawyers who on paper were tasked with all manners of legal work, but in practice, their jobs were to sue and lobby against the rivals on the other side of the river. Adidas brought out a new model of shoe? Sue them for patent infringement. Puma developed a new type of spike that gives a better grip? Make sure it gets banned ahead of the upcoming Olympics. This would go on and on, as vendettas and the rivalry continued to intensify throughout the latter stages of the founding brothers' lives.

It has become time to introduce two other main characters in the Adidas and Puma stories: Horst and Armin Dassler. Horst Dassler was the son of Adi and had worked for his father almost since the inception of Adidas. An entrepreneur at heart, he was sent away to France to start up the French arm of the company, something which he did with much success. Armin was the son of Rudi, and just like his cousin, he had also been involved in Puma since the early days. While the two had spent time together during their youth their contact had been sporadic since the split between the two brothers as the family was effectively cut in two halves, as some family members sided with Rudi and vice versa.

While the two had no reason to hate each other in the way their fathers did (something which was to change in dramatic fashion), they were not speaking to each other out of the simple fact that the family now was split in half. But at the 1956 Olympics in Melbourne, the two ran into each other and sat down for a series of meetings. While normality was still far away, the two cousins found mutual respect for one another, and both left with the hope that maybe, just maybe, the next generation would be able to reunite. The two met sporadically in professional settings during the following years and were always courteous and friendly towards one another.

During the middle of the 1960s, the two sons started to take over more and more of the daily operations. Their fathers were getting old and while Adi still enjoyed sitting down at his workbench trying to come up with the most effective placing of spikes on the underside of athletic shoes, both he and Rudi gradually stepped back from the day-to-day operations, leaving their sons to do most of the executive work.

Comparing the revenue growth of Adidas and Puma 1989-2023

Comparing the revenue growth of Adidas and Puma 1989-2023

The Brazilian footballer Pelé was global football's first true superstar, and according to some the best player to ever play the beautiful game. His star power was immense and he was indisputably the best player of his time. Naturally, this also made him an incredibly hot commodity for two companies based in a small German town called Herzogenaurach. Puma and Adidas were signing star players to left and right, getting Pelé's signature on a contract and either a pair of Adidas or Puma Kings on his feet would be an incredible commercial gain and also bring unprecedented prestige to whichever company managed to secure the contract. But the two companies also saw the hazard of getting into a bidding war over the signature, and the risk of one of them going bankrupt trying to beat the other for the signature was deemed to simply be way too high. Horst and Armin Dassler jointly decided that due to the risk of the cost of signing Pelé ballooning, neither Adidas nor Puma would sign him. This in turn came to be known unofficially as the “Pelé Pact”.

But the pact was not to last. A Puma representative (and a close friend of Armin) who lived in South America and worked with endorsement deals in the region had a great relationship with the Brazilian national team. Ahead of the 1970 World Cup in Mexico, he had been visiting the Brazilian footballers to talk about endorsement deals, hand out advanced paychecks, and of course: deliver Puma Kings to the team. Pelé, confused as to why he was essentially getting the cold shoulder (and no new football shoes to play with) went up to the Puma representative and told him that he wanted to play the upcoming World Cup in Puma Kings, and that he wouldn’t be expensive to sign. The representative, well aware of the agreement between the two companies, placed a call to Herzogenaurach.

Armin Dassler now had a decision to make. On one hand, the first steps towards normality with his cousin and the other side of the family had been made during the meetings. While normality was most likely never to return, a cordial and professional relationship was starting to build and old wounds were starting to get patched up. The commercial competition was never going to go away, but perhaps this was the start of some sort of armistice between the two sides of the families. While the Pelé Pact was never put to paper, it was a deal between two men who had just started to respect each other in earnest, and both of them had at least begun to stretch out a hand of reconciliation. Signing the forbidden endorsement deal would erase all of the progress that had been made, and irreparably damage the relationship even more. On the other hand, Puma had a golden opportunity to sign the best footballer in the world for next to nothing, ahead of a World Cup that was to be watched by millions and millions of fans across the globe. In other words: a golden opportunity to try to catch up with the popularity of Adidas.

As you might've guessed, Armin Dassler elected to go with option number two.

Horst Dassler was naturally, and quite rightfully so, furious. While the division in the family was cemented and beyond repair for another generation, there was football to be played. The Brazilian national team played exciting, captivating football, and spearheaded by Pelé the team made it to the quarter-finals without any major hiccups. This is also where one of the most famous athletic marketing stunts of all time took place. Just before the referee was about to blow the whistle to let the Brazilians take the kick-off, Pelé politely asked him to hold off on starting the game. Pelé's right shoelace had come untied, and the referee allowed him to tie his shoes before the game started, something he did slowly and methodically. The Puma marketing team knew, being who he was, that every single camera at the Jalisco Stadium would be focused on him as he laced up his new shoes: a pair of Puma Kings. Pelé would go on to repeat the stunt in the semi-final, and when he hoisted the World Cup trophy at the Azteca stadium after beating Italy in the final, Puma executives celebrated wildly. The exposure for the shoe was massive, and Puma had found a new way forward: star power.

The signing of Pelé and the commercial success that followed laid the groundwork for the marketing paths that the two companies would take in the following years. While Adidas went for quantity, Puma decided to aim for quality. This is something that would continue into the 70s and beyond as Adidas scooped up sponsorship after sponsorship with national and Olympic teams, with Puma setting their sights on signing the players and athletes with the most flair and star power. Adidas was becoming the football shoe of the masses in a distinct way with them sponsoring the World Cup and supplying nearly every single ball used in FIFA events. Puma on the other hand would refine its strategy of signing the best of the best in sports such as football, basketball, and running, and then using these athletes to spearhead campaigns.

One of the most fascinating aspects of the story of Adidas and Puma as companies is the fact that they were both founded and still have their global headquarters in the relatively small town of Herzogenaurach. The town, nicknamed Herzo by the locals, is a town divided in two distinct ways. The first is the river Aurach, which runs straight through the town, in which the Dassler brothers would fish as young kids. But it is the other divide that is far more pertinent to this story. As both Adidas and Puma grew, the two companies quickly became the two major employers in the town and the surrounding area, and Herzogenaurach became known as the “The Town of Bent Necks'' due to the locals' habit of always looking at a person's shoe when meeting someone. There was a popular joke during the Cold War that the only city that was more divided than Berlin was Herzogenaurach, even though there wasn't a physical wall dividing the two parts of the town.

But the barrier and division in the town ran deep, and as the two companies grew this would only become even more prevalent. The southern side of the city hosted Puma, its factories, and headquarters, and many of the workers lived on the south of the river Aurach. Adidas on the other hand dominated in the north. According to many locals during the most intense years of the rivalry (Between 1960-1980 depending on who you ask), a sense of tribalism and utter loyalty developed. Children whose parents worked for Adidas played with other “Adidas children” and vice versa, those loyal to Puma went to barber shops where the owners wore Puma, and the list goes on and on. One humorous anecdote from this time was when a crew of painters (presumably from out of town, and not realizing what they had done) showed up to do some work at Pumas factory all wearing Adidas. The foreman of the factory came rushing out in a fluster, and before any work was to be conducted he insisted that the crew be fitted with the latest Puma sneakers. The painters, all happy with their new shoes, showed up the month after at the Adidas factory to conduct some work. When doing so, they were all wearing Pumas, and the same thing happened.

This also permeated into the local football scene and the two local clubs were based on either side of the river, and naturally, one of them was sponsored by Adidas and the other sponsored by Puma. One of the most striking examples of how deep the loyalties in Herzogenaurach ran is the story of Lothar Matthäus, one of German football's most legendary players. His father worked at the Puma factory as a janitor and developed a close relationship with Rudi Dassler, and the young football talent Lothar was taken under the Puma patriarch's wings. The club on the north side was, naturally, sponsored by Adidas and was a much better team than the Puma-affiliated club in the south. Moving across the river might seem like a natural move for Matthäus, being a young talented footballer with the potential to go pro. But moving to the Adidas-sponsored team would have been considered treason by his father, Rudi, and the entire community and was therefore completely unthinkable.

While football, sneakers, and athletic shoes saw commercial success it wasn’t enough to propel the brands into global, massive companies. However, they were both in luck. During the ‘70s, a new trend was appearing that would go on to completely change the commercial prospects of Puma and Adidas in the decades to come. More and more people across the globe were starting to see fitness as an important part of their lives and running and everyday fitness was starting to become trendy. While Rudi and Adi had failed to pick up on this, the same can't be said for their sons. Both Armin and Horst Dassler had realized the commercial potential in the brewing fitness and athletic industry and Adidas and Puma started producing running shoes, training apparel, accessories, and everything in between. This proved to be a stroke of genius and helped both brands to grow exponentially as the trend cemented itself and fitness became a part of life for more and more consumers around the world.

When Rudi Dassler passed away in 1974, Armin took over the company. Puma had its IPO in 1986, and two years later all remaining family members sold their shares. A similar story unfolded on the other side of the river as Horst took over Adidas after his father's passing in 1978. He continued to run the company until he suddenly and unexpectedly passed away in 1987. Adidas became a stock corporation two years later and in 1990 all Dassler family members sold their shares. Adidas would become a public company in 1995. And while the companies were no longer under direct ownership of the Dassler family, several family members continued, and still work for both companies in some way or another. However, the rivalry has also cooled down significantly. Today, it's not uncommon for employees of one or the other companies to change employers, something which would have been completely unthinkable during the most intense days of the sneaker wars.

The legacy left behind by the two sides of the family is extremely apparent in Herzogenaurach. While residents in and around the town are more than likely still loyal to one brand over the other, they aren't going to prevent their children from playing with other kids who wear different sneakers than they do. Much of the production has also been moved away from the town to cheaper manufacturing sites spread across the world, with global headquarters remaining in Herzogenaurach.

Further Reading: Why Family-Owned Businesses Outperform

The story of Adidas and Puma is in many ways the story of how two companies competing against each other can spur each other on and encourage innovation. Both companies were constantly trying to outdo one another, both commercially as well as through technological innovation. Would all of the groundbreaking new shoe models have been developed without the pressing need to do something better than those on the other side of the river? Perhaps. But without the shadow of a doubt, the competition between these two companies (as was the case for the examples mentioned in the beginning of this article) spurred them on and took their products to a level that otherwise wouldn't have been possible. While Puma and Adidas are far from having any type of duopoly, the two have forced each other to continually improve or be left in the dust.

Further Reading:

• The Boeing-Airbus Duopoly: Titans of the Skies

• The Coca-Cola and Pepsi Duopoly: The Secret Ingredients

• Visa and Mastercard: The Global Payment Duopoly

Adidas and Puma of today have changed a whole lot from their early days as shoe manufacturers. Both still produce vast quantities of shoes, but it would be more accurate to describe them both as athletic lifestyle brands than anything else. This also means that they compete in an extremely competitive market against brands such as Nike, Lululemon, Under Armour, and several other large, global companies. But neither of these two companies has lost track of their heritage and history, and while the rivalry has been toned down to a more healthy level there is still a whole lot of prestige and pride at stake in a small Bavarian town whenever there is a new line of shoes released.