Born in the Franconian town of Herzogenaurach and trained as a cobbler, Adi Dassler started to produce his first sports shoes in his mother's laundry room after his return from the First World War. His father, Christoph, who worked in a shoe factory, and the Zehlein brothers, who produced the spikes for track shoes in their smithy, supported Dassler in starting his own business. On 1 July 1924, his older brother Rudolf joined the business, which became the Gebrüder Dassler Schuhfabrik (Dassler Brothers Shoe Factory).
At the 1928 Olympics, Dassler equipped many athletes, laying the foundation for the international expansion of the company. During the 1936 Olympics in Berlin, he equipped the African-American athlete Jesse Owens who went on to win four gold medals.
With the rise of Adolf Hitler in the 1930s, both Dassler brothers joined the Nazi Party, with Rudolf reputed as being the more ardent National Socialist.
Adolf served the Wehrmacht at the beginning of the war for one year on the west front. Rudolf was drafted in March 1943 fighting the red army in the east, and was captured in April 1945 by the Gestapo for Absence Without Leave. On the way to Dachau concentration camp, so the legend goes, he was freed by US troops, only to be imprisoned again as a POW in Hammelburg.
Adi had stayed behind to produce boots for the Wehrmacht and then broke away from the Nazi Party. The war exacerbated the differences between the brothers and their wives. Rudolf, upon his capture by American troops, was suspected of being a member of the SS, information supposedly supplied by his brother Adi.
By 1948, the rift between the brothers widened. Rudolf left the company to found Puma on the other side of town (across the Aurach River), and Adolf Dassler renamed the company Adidas after his own nickname (Adi Dassler).
In 1973, Adolf Dassler's son Horst Dassler founded Arena, a producer of swimming equipment. After Adolf Dassler's death in 1978, Horst and his wife Käthe took over the management. Horst died nine years later, in 1987. Adidas was transformed into a private limited company in 1989, but remained family property until its IPO in 1995.