German sportswear maker Adidas informed that business in the Greater China area had dropped by about 85% year-on-year. Coronavirus outbreak has resulted in store closures and fewer customers visiting the remaining outlets, which led this drops.
Few days ago, Adidas issued a statement where it said that it was implementing “applicable local directives” issued by Chinese authorities at all of its locations in the country, and confirmed that the company was already experiencing a negative impact on its Chinese operations—though it declined to go into further detail.
On Wednesday, though, Adidas revealed more information about the scale of the health crisis’ effects on business in China.
“Our business in the country performed strongly in the first three weeks of the year,” the statement said. “We have been experiencing a material negative impact from the coronavirus outbreak on our operations in China since then.”
Adidas informed that they have installed a dedicated task force to assess the situation, develop mitigation procedures and ensure the personal safety and financial security of the company’s employees in the country. The brand is working with Chinese authorities to take measures to contain the epidemic, including closing Adidas-owned and partner-operated stores.
The brand has seen some traffic decrease in other markets like Japan and South Korea, but hasn’t yet observed a major impact on business outside of China.
Adidas is now operating less than 500 of its own stores in the country, representing not quite 5 percent of the 12,000 total doors, including franchise businesses, that comprise its store fleet.