Adidas AG shares soared on Monday after the sportswear maker announced plans to replace CEO Herbert Hainer with Henkel AG Chief Executive Karsten Rorsted.
Adidas says Rorsted would become a board member as of August, and CEO in October.
Hainer’s contract was due to expire at the end of March 2017. Henkel, the maker of laundry powders and Dial soap, announced Rorsted’s resignation earlier in the day.
Adidas’s stock jumped by more than 11% on the news, with investors confident Rorsted can restore growth at the company.
“We welcome the appointment of Mr. Rorsted as successor to Mr. Hainer and hope that the long dry spell for Adidas’s profitability will come to an end,” said Union Investment fund manager Ingo Speich. The company has a 1.2% in Adidas, making it one of the top 20 shareholders.
Hainer has served as the CEO at Adidas for more than 14 years. He was facing intense pressure in 2015 as Adidas’ golf division faltered and its performance in North America continued to decline, allowing Under Armour to take the number two spot behind Nike.
Despite investor concerns, Hainer continued to say he would remain in his position until his contract expired in March 2017.
Hainer will exit the company at the end of September.