Adidas mulls store closures, looks to online
Global sportswear brand Adidas is shifting its retail model with the times and will look to store closures in coming years alongside an increase in its digital investment.
In an interview with The Financial Times, chief executive Kasper Rorsted, who has overseen a revitalisation in Adidas’ forward looking targets since stepping into the top job in 2016, said that the business would be thinning its portfolio of stores.
“Our website is the most important store we have in the world,” Rorsted told The Financial Times. “It has priority when we hire [and] when we allocate our resources.”
Adidas booked a 57 per cent increase in e-commerce sales in 2017, while total revenues increased by 16 per cent to more than $38 billion globally.
The business hoping to double its e-commerce sales by 2020 to more than $7.3 billion and has been investing heavily in digital initiatives, including the launch of a shopping app last year that received more than 600,000 downloads in less than two months.
To achieve its goal Rorsted has previously outlined around $1.64 billion in annual capital expenditure over the next few years, up from $1.378 billion in 2017 – with an emphasis on digital and online.
Adidas has already begun to thin its store portfolio, having already closed around 50 per cent of its owned Reebok stores in the US market.
There are still more than 2,500 company retail stores around the world though and approximately 13,000 mono branded franchise stores at the end of 2017, with no guidance provided on the extent of coming closures.