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Adidas, Puma getting crushed in China amid coronavirus outbreak

The coronavirus outbreak has slammed Chinese business for Adidas and Puma as stores remain shuttered and tourists stay home, the German sportswear companies said Wednesday.

Adidas said its business in the greater China area has plummeted about 85 percent compared to last year since the Lunar New Year holiday on Jan. 25 amid the outbreak that has killed more than 2,000 people.

The sneaker giant said it has also seen shopping traffic decline largely in Japan and South Korea, though its business has not been significantly affected outside China, where it reaped a fifth of its sales in 2018.

Puma also warned Wednesday that the coronavirus has “negatively impacted” its business since the start of February even as the company reported record sales and earnings before interest and taxes for 2019.

Puma has temporarily closed more than half its stores in China “due to restrictions of the local authorities,” the company said. The brand added that it has seen an impact in other Asian markets because of declining Chinese tourism.

While the outbreak will likely hurt sales and earnings for the first quarter of this year, Puma said it is “currently working under the assumptions that the situation will normalize in the short term and that we then will be able to achieve our full year targets.”

Coronavirus near Adidas store
Artyom Ivanov/TASS

China is a key market for Adidas and Puma — the country accounts for a large chunk of the companies’ sales and also serves them as a major producer. Adidas said it is working to mitigate the coronavirus outbreak’s effect on sourcing, and Puma CEO Bjorn Gulden said most of its factories were back up and running following the Chinese New Year holiday.

“We should be able to fulfill February and March orders with a three-week delay,” Gulden said in a news conference.

Puma’s Frankfurt-listed shares were trading up about 8 percent Wednesday morning while Adidas’s were up about 2 percent.

With Post wires