German sportswear giant Adidas could transfer its business in Russia to an alternative foreign investor, Kommersant reported on Tuesday, citing sources.
The move would allow around 100 of Adidas’ most profitable Russian stores to be relaunched, the news outlet said.
Like numerous other global companies, Adidas suspended operations in Russia and closed retail outlets and online stores in March 2022, following the start of Russia’s military operation in Ukraine. The German giant announced in October that it had decided to permanently wind down its business in the country.
Adidas has suffered financial losses as a result of the step but demand for its clothing and footwear remains high in Russia, retail experts say.
German broadcaster Bayerischer Rundfunk (BR) previously reported that Adidas operated about 500 stores in Russia and the CIS countries, which accounted for 3% of global sales. The sportswear giant has maintained limited activities in Russia by subleasing its office space and warehouses in Moscow Region.
Adidas announced last year that the decision to suspend operations in Russia had significantly affected profits. Revenues slumped by more than €100 million ($109.5 million) in the third quarter, particularly damaging the company’s direct-to-consumer (DTC) business.
Fellow sportswear giant Reebok has taken a similar approach, and last year transferred its Russian business to Turkey’s FLO Retailing, which operates brands such as the US Polo Association, Lumberjack, and Reno. The Turkish company has since rebranded Reebok outlets in Russia as Sneaker Box.
Source: Russia Today