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Adidas reports fourth quarter loss due to Reebok problems

Industry Sector

Textiles and Clothing

Published

7 March 2013

Author

Matt Bodimeade

Type of News

Market

Adidas, the world's second largest sportswear maker, has reported a loss for the last three months of 2012, mainly owing to impairment charges relating to its Reebok brand.

The group reported a fourth quarter operating loss of 239m euros ($311m; £207m), after it adjusted assumptions about the rate of growth at Reebok.

Adidas shares rose after Thursday's announcement, trading 3.7 percent higher at €74.32 in morning trading in Europe.

Despite Reebok's woes, Adidas' chief executive Herbert Hainer, said the company had performed well: "2012 has been another successful year for the Adidas group."

Reebok's poor performance has been largely in the Americas, including North America, Brazil and Latin America.

Reebok has struggled to recover from an ill-fated push into shoes designed to improve muscle tone as you walk. It has also been hurt by fraud at its Indian unit, the loss of an American football contract, and a lockout at the National Hockey League (NHL) in the United States that almost wiped out the season.

Adidas, which bought Reebok in 2005 for $3.8 billion to try to close the gap with market leader Nike is now trying to reposition it in the fitness sphere, providing clothes and shoes for a range of activities from aerobics to yoga and dance.

Reebok saw sales fall 12 percent in the fourth quarter to 428 million euros ($556.4 million), Adidas said on Thursday, while sales at the hockey unit - Reebok-CCM Hockey - dropped 18 percent due to the NHL lockout.

For 2013, Adidas said it expects sales to increase at mid-single-digit rate in 2013 from 2012's record level of 14.9 billion euros, though with a slower start to the year.

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