The German multinational Adidas noted the effects of the restrictions and temporary closures caused by the pandemic on its Spanish business. Its subsidiary Adidas Spain contracted its income by a quarter during the financial year 2020, falling back to 354 million, its lowest level in the last five years. In addition, it ended an uninterrupted streak of growth that stretched since 2014.
Specifically, the fall last year was 25.4%, as reflected in the annual accounts deposited by this company in the Mercantile Registry. However, the drop was uneven depending on the channel. In Adidas own stores this was 15%, down to 141.1 million, while in the rest of the distribution it was 31%, to 212.8 million. On the other hand, the Adidas Spain management report highlights a 39% increase in its own ecommerce, although it does not detail what percentage of the income it generates in this way.
In it, Adidas acknowledges that the drop in sales is due “to the impact of the coronavirus pandemic” and that it occurred both in the articles of its Adidas brand and in Reebok. Even so, it considers the result of 2020 “satisfactory considering the economic environment and the pandemic that has affected us for most of the year.”
Because the multinational sportswear company was able to close the year with profits, although 35% lower than last year. The net result of Adidas Spain was 8.6 million, although the company highlights that the margin was higher. It also highlights the reduction in investment in marketing and operational savings to mitigate the effects of the pandemic. On the other hand, the company took advantage of an ERTE that affected an average of 642 employees, mainly from stores, for which an income of 795,330 euros was recorded as Social Security bonuses. Due to this ERTE, the Spanish subsidiary of Adidas allocated its profit to reserves and not to dividends.
Looking ahead to 2021, the company has budgeted sales increases in its two brands, and also in profitability. “The business outlook remains good, we do not expect the same impact that we have suffered from the pandemic and we have anticipated an increase in net sales, despite the fact that we will increase our operating and marketing expenses.”
As of December 31, 2020, Adidas Spain had a total of 724.2 million euros committed to “promotion” contracts with “sports federations, clubs and athletes”, with maturities of up to 10 years. They are 111 million less than a year earlier, or 13% less.