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Adidas and Puma sales collapse in China amid coronavirus outbreak | Business


Adidas and Puma have reported a collapse in sales in China as a result of the coronavirus outbreak and warned disruption was spreading to other markets.

Adidas said its first-quarter sales would be down by as much as €1bn (£870m) in Greater China and about €100m in Japan and South Korea. The slump would lead to a €400m-€500m hit to operating profit, it said.

The World Health Organization is recommending that people take simple precautions to reduce exposure to and transmission of the Wuhan coronavirus, for which there is no specific cure or vaccine.

The UN agency advises people to:

  • Frequently wash their hands with an alcohol-based hand rub or warm water and soap
  • Cover their mouth and nose with a flexed elbow or tissue when sneezing or coughing
  • Avoid close contact with anyone who has a fever or cough
  • Seek early medical help if they have a fever, cough and difficulty breathing, and share their travel history with healthcare providers
  • Avoid direct, unprotected contact with live animals and surfaces in contact with animals when visiting live markets in affected areas
  • Avoid eating raw or undercooked animal products and exercise care when handling raw meat, milk or animal organs to avoid cross-contamination with uncooked foods.

Despite a surge in sales of face masks in the aftermath of the coronavirus outbreak, experts are divided over whether they can prevent transmission and infection. There is some evidence to suggest that masks can help prevent hand-to-mouth transmissions, given the large number of times people touch their faces. The consensus appears to be that wearing a mask can limit – but not eliminate – the risks, provided it is used correctly.

Justin McCurry

The German sportswear companies ring upr almost a third of their sales in Asia and rely on factories in the region to make trainers and T-shirts.

Puma has withdrawn its financial guidance to investors as it said it could not “quantify the negative effect” of the virus on sales and profits.

“Given the duration of the situation in China, the negative impact in other Asian countries and now also the spread to Europe and the US, we unfortunately have to conclude that a short-term normalisation will not occur,” it said.

Sporting events around the world have been cancelled, postponed or played without spectators, with questions being raised about the viability of the forthcoming Olympic Games in Japan and the Euro 2020 football championship.

The Adidas chief executive, Kasper Rorsted, said if both events were postponed it would mean a €70m hit to sales.

Shares in Adidas and Puma, which have already fallen heavily, were down 9% and 5% on Wednesday afternoon.

Shares in the market leader, Nike, which also warned last month of an impact from the virus, were down 3%. A Jefferies analyst, James Grzinic, said: “The virus hit looks worse than feared.”

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