Adidas Closes Stores in Russia

The world’s second largest manufacturer of sporting goods, the German Adidas Group announced its financial results for 2014. This is stated in the press release of the company.

The company’s sales grew by 2.3% at the end of the year, up to 14.5 billion, In particular, thanks to the 2014 FIFA World Cup, gross profit decreased by 1.1%, to $6.9 billion.

Adidas Group CEO Herbert Heiner also commented to journalists on the company’s results in Russia in 2014.

The closure of 200 stores is due to the difficult economic situation in Russia, which affected the company’s financial results. First, Adidas experienced a decline in consumer activity. Secondly, despite the fact that the profit in rubles grew by 20%, the exchange rate difference leveled the final results. At the end of the year, due to changes in the exchange rate, the company lost more than 550 million euros in Russia.

The crisis has also forced a rethink of plans to develop the Russian retail chain Adidas, which includes more than 1000 stores. Heiner told reporters that the company will optimize the network: to reduce costs Adidas closes stores in Russia, namely, 200 outlets will be closed or temporarily shut down. Some of them will close due to unprofitability, some – to update the design. At the same time, Adidas plans to open 100 new stores.

Adidas does not want to lose the loyalty of Russian customers, heiner says, so the prices of the company’s products will be increased only by 10-15% depending on the type of goods, which is less than the real fall in the value of the ruble. In sales of sports equipment in Russia, Adidas takes the first place, its subsidiary Reebok – the third.