Adidas cuts costs after profits shock; RETAIL.
Sportswear giant Adidas will be hoping for a World Cup-inspired boost after revealing a 97 per cent slide in profits for the first three months of this year.
The gloomy trading update emerged as the German firm announced plans to speed up its restructuring through the removal of a tier of regional management.
It is also carrying out a review of under-performing retail stores.
and golf brand TaylorMade, posted net profits of just pounds 4.5 million after sales decreased by six per cent in the first quarter and the company faced higher raw material and wage costs. It warned margins and earnings per share were expected to decline this year, before gaining impetus ahead of the 2010 World Cup.
Chief executive Herbert Hainer said: "We've faced a number of economic and market challenges in the first quarter of 2009.
"Our results have been materially affected by higher input prices, currency devaluation effects and restructuring costs." He said the aim of the latest business overhaul would be to bring the Adidas brands and products "closer to the consumer".
"The current economic climate adds urgency to accelerate our plans," he added.
The company hopes that by removing a layer of regional management it will strengthen the ties between the global organisation and local markets. It did not disclose how many jobs may be affected.
Since 2000, the group has grown in complexity from 95 companies to 190 worldwide. Recent deals have included the 2005 takeover of US firm Reebok for pounds 2.76 billion..
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|Publication:||The Birmingham Post (England)|
|Article Type:||Financial report|
|Date:||May 6, 2009|
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