German sportswear giants said Wednesday the virus from China is denting their otherwise thriving businesses, with Adidas reporting an 85% drop in Chinese business compared to a similar period last year.
Puma, which is headquartered in the same Bavarian town, said it is coming off its best year ever, with revenue surging and a strong fourth quarter. However, the virus is threatening to put a hitch in their stride.
“After a good start into 2020, February has of course been negatively affected by the outbreak of COVID-19,” Puma CEO Bjørn Gulden told investors. “The business in China is currently heavily impacted due to the restrictions and safety measures implemented by the authorities. Business in other markets, especially in Asia, is suffering from lower numbers of Chinese tourists.”
Adidas, the biggest sportswear company in Europe, said it has a dedicated team in China to work with authorities and ensure the safety of its employees.
However, it is dealing with a “pronounced” reduction in foot traffic after it was forced to close many of its stores in China.
“Consequently, our business activity in Greater China has been around 85% below the prior-year level since Chinese New Year on January 25,” the company said.
Adidas said there’s been some decline in traffic elsewhere, namely Japan and South Korea, though it has “not yet observed any major business impact outside of Greater China.”
“As the situation keeps evolving on a daily basis, the magnitude of the overall impact on our business for the full-year 2020 cannot be quantified reliably at this point in time,” the company said.
Likewise, Puma said it is difficult to forecast the full impact of the virus, given the uncertainty around the outbreak.
“We will do everything we can in the short term to minimize the damage and remain very positive in the long term both for our industry and for PUMA,” Mr. Gulden said.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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