Footwear-giant Adidas has decided to take a different strategic approach to make up for its loss during the novel coronavirus pandemic lockdown.
Reportedly, almost 70% of Adidas stores are currently shut. The company said financial flexibility is key to its agenda and it would reallocate resources to “e-commerce, IT, and additional set-up.”
Adidas AG said Monday that net profit and sales sharply fell in its first quarter, and it warned that the second quarter should be even more severely hit.
Moreover, the company said net profit for the period was 31 million euros ($33.5 million), down by a whopping 95% from EUR632 million a year earlier.
At the moment, we are focused on managing the current challenges and doubling down on the recovery in China and the opportunities we see in e-com -CEO Kasper Rorsted
According to the brand, as consumers are in lockdown and are trying to ignore stepping outside unless necessary, it has become important for the company to shift its focus to digital platforms and focus on e-commerce.
The brand aims to reopen stores throughout May and June and in the US by mid-May, but it depends on many factors, including the containment of the virus.
“Adidas is well-positioned in the structural growth sporting goods industry, which benefits from secular shifts including an increasing focus on self-health and wellness and casualization trends,” analysts at RBC said in a note to clients on Monday.
Coronavirus created “meaningful dislocation, which could lead to a prolonged recovery profile, given Adidas’s wholesale distribution, if excess inventory is not aggressively addressed.”
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