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Coronavirus causes 85% plunge in Adidas business in China

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
·2 mins read

The coronavirus outbreak has brought Adidas’ (ADS.DE) business activity in China to a near-halt.

The world’s second largest sporting goods manufacturer said on Wednesday a significant number of its stores and partner stores were still shut down, and those that were open are suffering a big drop in customer traffic.

As a result, business activity has plunged by around 85% since the Chinese New Year on 25 January from the same time the year before, Adidas said.

BEIJING, CHINA - FEBRUARY 1, 2020: People in face masks walk in a street during an outbreak of the 2019-nCoV coronavirus, which started in Wuhan in December 2019; according to recent data, the number of people infected with the new strain of coronavirus has risen over 14,000, with the death toll reaching 305. Artyom Ivanov/TASS (Photo by Artyom Ivanov\TASS via Getty Images)
BEIJING, CHINA - FEBRUARY 1, 2020: People in face masks walk in a street during an outbreak of the 2019-nCoV coronavirus. Photo: Artyom Ivanov\TASS via Getty Images

“In view of the daily changing situation, the extent of the overall impact on our 2020 financial year cannot be reliably quantified at this time,” said Adidas.

The company, headquartered in the Bavarian town of Herzogenaurach in Germany, is also seeing a drop in the numbers of customers visiting its stores in Japan and South Korea, but says it has so far not been able to quantify the impact of the virus outbreak on business activities outside of China.

Adidas said it will update in more detail on the impact of coronavirus on sales and profit during its annual earnings report in March.

READ MORE: Deutsche Bank: coronavirus may drag Germany into recession

Its German rival Puma (PUM.DE) said today that the virus outbreak could be expected to hurt sales and profits in the first quarter — half of its shops in China are temporarily closed — but that it was still expecting to hit its overall targets for 2020.

Adidas and Puma are two on a long list of global brands, including Apple and Starbucks, that have had to shut all or most of their stores as the coronavirus outbreak rapidly spread across China from its epicenter in Wuhan city in Hubei province.

Nike said last week that in the short term it expected the coronavirus situation “to have a material impact on our operations in Greater China,” but noted that its online business was still strong.

As of today, the death toll from coronavirus stands at over 2,000. More than 75,000 people have been infected, all but around 1,000 of them in mainland China.

READ MORE: Global stocks sink as Apple warns of coronavirus impact