Adidas & Puma warn on coronavirus disrupting business

328
Adidas Puma coronavirus
The outbreak has resulted in store closures, with many other retailers temporarily shutting down their stores
// Adidas sales in China have dropped 85% since January 25
// Puma closed over half of its stores in China and now expects an adverse effect on revenues
// Almost 1/5 of the 409m pairs of shoes & trainers Adidas made in 2018 were produced in China

Adidas and Puma have said the coronavirus outbreak has severely disrupted their businesses in China.

The outbreak has resulted in store closures, with many other retailers also temporarily shutting down their stores to ensure staff remain safe.

Adidas’ sales in China have plummeted 85 per cent since January 25, compared with the same period a year ago.


READ MORE:


Adidas added that it had closed a “significant number” of outlets and reported a “pronounced” reduction in customers at those that remained open.

“We have experienced a material negative impact from the coronavirus outbreak on our operations in China,” Adidas said in a statement.

Meanwhile, its rival Puma has closed over half of its stores in China and now expects an adverse effect on revenues in the first quarter of the year.

“Business has of course been negatively affected by the outbreak,” Puma chief executive Bjorn Gulden said.

Almost a fifth of the 409 million pairs of shoes and trainers Adidas made in 2018 were produced in China, although the country’s relative importance in production has declined in recent years.

Revenue in Puma’s other Asian markets has suffered due to the lower number of Chinese tourists.

Adidas said it had also seen declines outside mainland China, mainly in South Korea and Japan.

Puma said it expected to be able to hit its 2020 targets despite the disruption.

Moreover, Nike also temporarily shut down half of its stores in China.

The coronavirus outbreak has had a major impact on retail, particularly the luxury sector as the value of the FTSE 100 dropped by £44 billion last month after luxury retail groups saw their shares decline.

Luxury retail groups such as LVMH, Christian Dior, Hermes and Gucci owner Kering – all reliant on Chinese demand – saw their shares drop.

Burberry closed 24 of its 64 stores in mainland China earlier this month as the coronavirus outbreak continued to raise fears.

Last week, Apple shut all 42 of its stores in China for at least eight days as a result of the spreading virus, while denim retailer Levi’s shut about half of its stores in China due to the outbreak.

Michael Kors parent company Capri Holdings warned last week that the coronavirus outbreak could result in a $100 million (£77 million) hit to revenue.

Click here to sign up to Retail Gazette’s free daily email newsletter

LEAVE A REPLY

Please enter your comment!
Please enter your name here