COVID-19 causes Adidas and Puma Sales to Plummet Sharply

COVID-19 causes Adidas and Puma Sales to Plummet Sharply

German sportswear makers Adidas and Puma said yesterday that store closures in China are being blamed on the Novel Coronavirus outbreak that resulted in sales plummeting in recent weeks.

“Our business activity in Greater China has been around 85 percent below the prior year level since Chinese New Year on January 25,” Adidas said in a statement.

Competitor Puma said “business in China is heavily impacted due to the restrictions and safety measures implemented by the authorities”.

More than half of its own stores and partner outlets are closed at the moment, it added.

Adidas said it faced “a significant number of store closures” in its network of 500 owned stores and 11,500 franchises in China, while fewer people are shopping at those which remain open.

The group’s Greater China region, which includes Taiwan and Hong Kong, has for years been one of the fastest-growing areas of the world for Adidas sales.

And the Asia-Pacific region as a whole accounted for around one-third of Adidas’ $6.9 billion in revenues in the first nine months of 2019.

Despite the Novel Coronavirus spreading to some other countries in the region, “we have not yet observed any major business impact outside Greater China,” Adidas said.

But Puma said “business in other markets, especially in Asia, is suffering from lower numbers of Chinese tourists”.

Looking ahead, neither company could predict how big the impact of the virus would be on their annual results.

Puma said it expected the situation to “normalize in the short term”, keeping the company on track to achieve its full-year targets.

Adidas bosses will provide an update when the company releases its 2019 earnings data on March 11.

Source: Khmer Times