Dassler brothers feud

The hatred and bitterness behind two of the world's most popular brands

March 22, 2013: 8:48 AM ET

The unbelievable story of the two brothers who started Adidas and Puma and wound up bitter enemies.

By Omar Akhtar

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FORTUNE -- Cain and Abel. Romulus and Remus. Adidas and Puma? The rivalry between two of the world's most recognizable brands went far beyond mere corporate competition. It was a vicious family feud that not only pitted two brothers against one another, but also divided the inhabitants of their hometown into warring factions -- and lasted 60 years.

In the 1920s, the brothers were partners in the Dassler Brothers Sports Shoe Company, operating out of their mother's laundry room in the small German town of Herzogenaurach. Adolf ("Adi") Dassler was the quiet, thoughtful craftsman who designed and made the shoes, complemented by the older Rudolph ("Rudi") who was the extroverted salesman. Although the brothers joined the Nazi party when Hitler seized power in 1933, it didn't stop them getting legendary African-American track star Jesse Owens to wear their shoes as he competed and won four gold medals in the 1936 Olympics. Owens' victory gave the shoes international exposure, and sales of the Dasslers' product exploded.

But the success created new tensions in the brothers' relationship, already strained by the fact that their families lived in the same villa despite their wives not getting along. There were several incidents that were said to have precipitated their conflict, but the most widely accepted one took place during World War II when the Allies were bombing Herzogenaurach. As Adi and his wife climbed into a bomb shelter already occupied by Rudi and his wife, he exclaimed, "The dirty bastards are back again," referring to the Allied forces. Rudi was convinced the remark was directed at him and his family. A feud -- one of the most epic and, well, Biblical in business history -- was born. (Not surprisingly Adidas vs. Puma is No. 20 on Fortune's list of the 50 greatest business rivalries of all time.)

When Rudi got called up for service, he suspected Adi and his wife had schemed to get him sent to the front so they could have him out of the way at work. Later, Rudi was arrested first for deserting his post and then by the Allies on suspicion of working for the Gestapo. On both occasions, Rudi was convinced that Adi was the one ratting him out, his suspicions confirmed by a report filed by an American investigating officer. While Rudi languished in a prisoner of war camp, Adi rebuilt the business, selling shoes to American G.I.s.

MORE: The 50 greatest business rivalries of all time

The conflict escalated as the brothers split the company in two in 1948, dividing the assets and the employees between themselves. Adi named his company "Adidas," a combination of his first and last names. Rudi attempted the same by first naming his company "Ruda" but eventually changed it to the more athletic sounding "Puma." The two built competing factories on opposite sides of the river Aurach and quickly became responsible for much of Herzogenaurach's economy, with nearly everyone working for one company or the other.

As the entire town got caught up in the Dassler family feud, the rivalry reached ridiculous proportions. There were local businesses that served only Adidas or only Puma people, dating or marrying across company lines was forbidden, and Herzogenaurach became known as "the town of bent necks" since people first looked at which company's shoes you were wearing before deciding to talk to you.

While Rudi had the sales staff and was better at moving product, Adi had the technical know-how and better relationships with athletes who could provide exposure, tipping the scales in favor of Adidas, with Puma constantly playing catch-up. However, in focusing so heavily on each other, both the companies were slow to react to the threat of Nike (NKE), which would come to dominate the athletic footwear industry, leaving them far behind.

It wasn't until 2009 when employees of both companies symbolized the end of six decades of feuding by playing a friendly soccer match. By then, the Dassler brothers had both died, within four years of each other. Even in death, the animosity continued as the brothers were buried at opposite ends of the same cemetery, as far away from each other as possible.

Want more competition, contempt, and all-out conflict? Check out Fortune's ebook Rivalry, available now, free to subscribers on our tablet apps. Download it for the iPad here.

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