Adidas expects significant rise in costs

Worldwide
Published:  14 December, 2015

The German sports footwear manufacturer has warned of a significant rise in sourcing costs by 2020 during an investors meeting on Wednesday (December 9).

Adidas expects a sharp rise in labour costs in emerging markets where it holds production as well as an increase in material costs. However, the company said it should be able to compensate by lifting prices and cutting overheads, it said on Wednesday.

It also announced that it expects higher input costs and currency effects to push down its 2016 gross margin by 50-100 basis points.

"We are optimising our processes throughout the group and along the entire supply chain to drive further efficiency gains and we are continuing our structured hedging approach," said Robin Stalker, Chief Financial Officer of Adidas.

As part of its dynamic R&D strategy, Adidas created Futurecraft Leather, a completely seamless shoe that enables flex, support and comfort made from one single piece of leather. Read more here.

Source: Reuters

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