Adidas to Boost China Stores 9% to 6,100 Next Year
Nov. 16 (Bloomberg) -- Adidas AG, the world's second- largest sporting-goods maker, will increase China stores by 9 percent to 6,100 by the end of next year as it forecast sales growth of at least 10 percent in the country.
Adidas plans 500 net store openings in the world's most populous nation, with Greater China sales projected to exceed 1 billion euros ($1.36 billion) next year, Chief Executive Officer Herbert Hainer said in an interview today in Shanghai.
The clothing and footwear market in China may be worth 334 billion yuan ($50 billion) in 2010, almost double what it was five years ago, data from Euromonitor International show. Adidas competes with Nike Inc., the world's largest sporting-goods maker, and Li Ning Co. in China, where retail sales growth averaged 18.3 percent in the 10 months through January.
"I'm quite confident" in China, Hainer said. "We'll see double-digit growth in China over the coming years. It's a big population and a lot of people want their sneakers."
Adidas plans to add about 2,500 stores in smaller Chinese cities over the next five years, expanding its presence to 1,400 cities from 550 now.
Consumers in smaller cities want "access to global brands,'' Christophe Bezu, Adidas' Greater China chief, said at a briefing in Shanghai.
China Suppliers
Adidas faces the challenge of managing its prices in China as inflation and raw-material costs rise, said Sophia Wu, a Shanghai-based analyst at Sinopac Securities. She has a neutral rating on Li Ning.
China will be the biggest source of products for the Herzogenaurach, Germany-based company for at least another 10 years, even as suppliers may "have to raise salaries for their workers," Hainer, 56, said in a separate interview on Bloomberg TV. Adidas buys 35 percent to 40 percent of its products from suppliers in China, he said.
Belle International Holdings Ltd. has the biggest market share in China's clothing and footwear market with 6.5 percent, according to Euromonitor. Li Ning, the Chinese sportswear maker started by a former Olympic gymnast, ranked second with 2.6 percent and Anta Sports Products Ltd. was third with 2 percent by 2010, according to the researcher.
Adidas today said Colin Currie will take over from Bezu as managing director for Greater China, effective Jan. 1. Bezu will be the company's chief e-commerce officer next year.
To contact the Bloomberg News staff on this story: Michael Wei in Beijing at mwei13@bloomberg.net
To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net
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