After lockdown restrictions were removed, Adidas’ China sales have bounced back faster than anticipated, fostering hopes that the brand can start to recover from a massive drop in worldwide demand, the Financial Times reported.
The company noted in a statement cited by the outlet, “Overall revenue growth in Greater China turned positive for the month of May.” It had previously cautioned in April that it would take many months for sales in the country to return to the level of 2019.
China has turned into one of the biggest individual markets for the Nike competitor following five years of double-digit expansion, bringing in over 20 percent of total sales last year. China has become an indicator for when the sportswear brand and the broader consumer goods industry will go back to normal following the lockdown.
Adidas sales in China plummeted by 80 percent amid the peak of the lockdown. And, while footfall in the country was still below that of the prior year, the brand said it achieved bolstered sales through “targeted efforts.”
In separate news, Adidas apologized for saying it would stop rent payments for shops worldwide that needed to close because of coronavirus lockdown, and stated that it would pay for April rents. Germany's labor minister had called out the behavior as irresponsible and noted that the company saw formidable profits in recent years.
Many retailers worldwide have been seeking deferred rent payments as they try to survive the coronavirus shutdown, placing the financial burden on their landlords. The company said in a letter sent to the media on April 2, “Almost all over the world there is no normal business anymore. The shops are closed. Even a healthy company like Adidas cannot stand this for long.”
Separately, it was noted at the time that Mattress Firm and Subway were among the big U.S. merchants that didn’t want to pay rent in full due to the coronavirus’ impact on the country’s economy.