Adidas was one of the first large German corporations to feel the effects of the corona pandemic because the Chinese market had almost completely collapsed. But the savings and increased online commerce are having an effect.
Herzogenaurach (dpa) – The world’s second-largest sporting goods manufacturer is doing a little better again. Thanks to a strict course of austerity and significant increases in online retail, Adidas remains stable again in the profit zone.
Despite substantial losses in the first half of the year, the bottom line was a profit from continuing operations of € 291 million. At the same time, last year, the Swiss franc had earned 1.737 billion euros.
In the third quarter, after savings in marketing, more cautious inventory management and good online sales, there was a significant recovery, Adidas announced in Herzogenaurach on Tuesday. Sales and profits would be almost at the level of the previous year. The end result was that Adidas was left with 578 million euros. In the fourth quarter, Adidas expects a development similar to that of the third quarter, but with considerable risks due to the worsening of the crown situation.
“Our business recovered very well in the third quarter. Our focus on a healthy inventory level, profitable direct sales, and disciplined delivery to partners has paid off: Inventories fell by more than € 500 million and the share of full-price e-commerce sales increased by double digits. “Said Kasper, CEO of Adidas. Rorsted.
A syndicated loan from state bank KfW, which was requested to overcome the crisis in the crown, has been repaid. The € 500 million loan had already been repaid in October, including interest, he said. A banking consortium with KfW participation had granted Adidas a credit line of three billion euros to overcome the crown phase.
At the same time as the repayment, Adidas says it has received another 1.5 billion euro loan from a group of banks. Among the new lenders are Deutsche Bank and Britain’s HSBC as leaders of the consortium. Despite the recovery in the fall, the corona pandemic has given Adidas a hard time. Sales in the first nine months on a currency-adjusted basis decreased 18 percent compared to the same period last year to € 14,297 million.
Adidas was one of the first large German corporations to come under pressure due to the corona pandemic because China’s important market had almost completely collapsed. Sometimes all Adidas stores in China and most of those in America and Europe were closed. The increase in online sales by 51 percent could not fully compensate for this, especially since, in addition to top-notch sport, much of popular sport was temporarily inactive. Adidas is currently reopening 93 percent of its stores worldwide.