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Sports clothes giant eyes sales rise past £1bn

Turnover is expected to rise past 2020’s total of more than £1bn at the UK arm of Adidas because of the post-Covid shift to online sales.

The division, which is headquartered in Stockport, added that the increase in demand for sports-inspired apparel and footwear is a positive for the industry.

The update has been included in newly-filed documents to Companies House for the company’s full-year to December 31, 2020.

READ MORE: Senior and long-serving UK Adidas executive leaves US retail giant

The accounts show Adidas UK’s turnover fell from £1.1bn to £1.045bn in the 12 months while its pre-tax profits went from £25.6m to £20.4m.

A statement signed off by the board said: “In the first half of 2020, the global sporting goods industry was negatively impacted by lockdown and quarantine measures due to the Covid-19 pandemic.

“Like many other industries this led to a decline in demand for sporting goods, even though the shift toward digital channels partially compensated for the adverse impacts from store closures.

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“In addition, lower consumer confidence due to the drop in economic activity as well as the cancellation and postponement of major amateur and professional sports events posed headwinds for the industry.

“Adidas took several decisive steps in order to safeguard its financial flexibility.

“Focus was put on generating cash inflows through the e-commerce channel and through intensified credit collection.

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“At the same time, the company tightly controlled cash outflows by adjusting the order book and reducing operating expenses as well as capital expenditures.

“We have seen positive long-term industry drivers such as the increasing penetration of sports-inspired apparel and footwear have been amplified by the pandemic and digital channels are set to continue to partially compensate for adverse impacts from store closures and social distancing measures.

“Although in a similar situation in Q1 2021, we are still anticipating an increase in 2021 sales, due to the increased business via the e-commerce channel.”

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