London CNN Business  — 

Adidas has appointed the head of Puma to succeed outgoing CEO Kasper Rorsted, betting on his ability to replicate its crosstown rival’s comeback.

Norwegian Bjørn Gulden, 57, will become CEO of Adidas (ADDDF) on January 1, 2023, the German sportswear brand said in a statement on Tuesday.

Shares of the company gained around 1% in Frankfurt. The announcement was widely expected after Adidas confirmed on Friday that it was in talks with Gulden, news that sent its stock up 20%.

Gulden, who has been CEO of Puma since 2013, is credited with engineering a turnaround at the smaller sports company, which reported its highest ever quarterly sales between July and September.

He led the apparel and accessories business at Adidas for seven years in the 1990s. A professional football and handball player, he was also CEO of Danish jewelry brand Pandora (PANDY) and is chairman of Salling Group, Denmark’s largest food retailer.

“We are very pleased to welcome Bjørn Gulden back at Adidas. [He] brings almost 30 years of experience in the sporting goods and footwear industry,” Adidas chairman Thomas Rabe said in a statement. “As CEO of Puma, he re-invigorated the brand and led the company to record results,” Rabe added.

Gulden takes over amid a deepening slump in Adidas’ home market of Germany and as inflation begins to weigh heavily on consumer spending globally. Last month, the company lowered its financial guidance for the year, telling investors it would need to ramp up sales promotions due to lower store traffic in the Greater China region and a drop in demand in Western markets since the beginning of September.

It will also take a €250 million ($247 million) hit to its fourth quarter sales after ending a lucrative partnership with Ye, also known as Kanye West, over antisemitic comments made by the rapper. Yeezy products generated nearly $2 billion in sales last year for Adidas, 8% of the company’s total revenue, according to Morgan Stanley. The line helped Adidas attract new customers and get more shelf space in stores.

It’s the latest blow to Adidas, which offloaded Reebok last year for less than it originally paid for the US fitness brand.

The sale to Authentic Brands Group was part of a five-year plan that was aimed at growing Adidas’ own brand through direct-to-consumer and e-commerce channels.

It’s unclear what will become of this strategy under Gulden, who has continued to embrace sales to retailers and told Vogue Business this week that he doesn’t believe in a “complete [direct-to-consumer] or monobrand strategy.”

Adidas said Rorsted will leave the company by mutual agreement at the end of this week. Chief financial officer Harm Ohlmeyer will lead Adidas until Gulden takes over.

Adidas and Puma are both based in the Bavarian town of Herzogenaurach, where they were founded in 1948 by feuding brothers Adi and Rudolf Dassler.

-— Julia Horowitz and Danielle Wiener-Bronner contributed to this report.