Adidas business in China returns to growth

Worldwide
Published:  05 June, 2020

The global sportswear manufacturer said that, throughout May, it continued to execute its store reopening plan around the world and Greater China is the company’s first major market on the road to recovery, with all own- and partner-operated stores having been open since mid-April.

According to Adidas, as of June 4, around two-thirds of the global store fleet was at least partially open. Store traffic is said to have remained below the prior year level in May, but targeted efforts to revitalise retail have led to “sequential improvements” since stores reopened, and the traffic shortfall was more than offset by an increase in conversion rates and the exceptional growth in the company’s e-commerce business. As a result, overall revenue growth in Greater China turned positive for the month of May, said the company, adding that due to the “earlier-than-expected return to growth”, it now expects Greater China sales for the second quarter to be around the prior year-level. 

Almost all of the company-owned stores in other markets within Asia-Pacific as well as in Emerging Markets are reported to have resumed operations. In Europe, three-quarters of the company’s stores have reopened as of June 4, with the majority operating at reduced hours. While around half of the stores in Russia/CIS have also resumed operations, the opening rates in North America and Latin America are still significantly below 50%. 

Adidas said those developments are largely consistent with the company’s previous assumptions, and that is does not project a significant deviation from the second quarter top- and bottom-line guidance as provided in April.