Adidas will maintain opening new shops regardless of Covid’s ecommerce surge: CEO
Kasper Rorsted, CEO of Adidas, told CNBC that the German sportswear company will continue to invest in brick and mortar stores despite the boom in e-commerce sales during the coronavirus pandemic.
“There is no doubt that online business has accelerated in two to three years in the future … but I think if you ask most people, going out and shopping is a great social element and the products are easy to see and feel again, “Rorsted said in an interview that aired on Closing Bell on Wednesday.
“So we’re going to keep building stores. We’ll announce that in March next year, where we’re going to build and create a great store experience,” he added.
Adidas posted a 51% increase in online sales in the third quarter compared to the same period last year. This followed a 93% increase in the second quarter, despite total sales decreasing 34% on a currency-neutral basis. For the year, Adidas plans online sales of more than 4 billion euros (4.9 billion US dollars), said Rorsted, a significant improvement from around 1 billion euros about four years ago.
Rorsted, Adidas CEO since 2016, said the company’s growing e-commerce strength will affect the in-store shopping experience going forward. “We believe the stores are still here, but much closer to the online experience,” he said. “I think most people are really bored of sitting at home,” added Rorsted.
Adidas announced earlier this week that it has initiated a “strategic alternative evaluation” process for Reebok, including a potential sale of the brand, which it acquired in 2006. Rorsted told CNBC that the pandemic was “not at all” the reason Adidas decided to rethink its approach with Reebok. Rather, he claimed that the health crisis had actually improved the underlying fundamentals of the sporting goods industry, as more and more people wear casual clothing while working from home and taking up outdoor recreational activities.
“I think there will be a long way to go before people want to get back into suits and brown shoes. This trend continued. There is no doubt the pandemic really accelerated this,” said Rorsted. “Working from home and having a much more casual lifestyle is a big part of a lot of the clothes we have,” he added.