Adidas has announced that the company has experienced significant traffic reduction amounting to 85 percent compared to last year's values. Similarly, German sportswear maker Puma also underwent negative impacts on its business due to China's slowing economic activity.
Adidas announced that business activity in China is alarming for companies. It claimed that the slow economic activity in the area has caused a negative material impact on its profitability.
According to CNBC, the sporting goods industry has been badly hit by the public health troubles in China since the country is a key sourcing hub. The report claimed that several sneakers and sporting goods products are produced in China and other Asian countries.
Adidas, who contributes one-third of its sales to Asia, has opted to close some of its outlets in Asia due to Chinese troubles. The company claimed there had been traffic declines in other markets such as Japan and South Korea, but it had not yet measured the degree of business impact outside mainland China.
In a statement, the company claimed that business situations evolve on a daily basis and that the overall impact of China's slowing economy on the business still cannot be quantified at this point in time.
The statement further claimed that one of the recent developments was the increase in the value of shares of Adidas in the market despite the mentioned economic troubles in China. Adidas then announced that it would share more details about the financial impact of China on the brand after it would officially release its full-real reports by March 11, 2020.
On the other hand, Puma also announced that slowing Chinese business activities have negatively impacted its sales. In an official statement released last Wednesday, Puma claimed that more than half of both their and partnered stores have been shut down due to local restrictions imposed by authorities.
In other news, Forbes also reported that Britain's biggest carmaker Jaguar Land Rover has altered its manner of receiving a shipment of car parts from Chinese suppliers. The company's chief executive officer Ralph Speth announced that the firm would struggle to keep production steady in its UK plants if shipments for car parts from China continue.
He added that the company is currently safe for three weeks of production from the shortage of car parts supplies. However, he noted that the brand is missing some items that have been put into suitcases and are flown from China to the UK.
