Net profits fell 93 per cent in the second quarter at sportswear maker Adidas AG, with declining margins at its loss-making Reebok division partly to blame.
The drop in second-quarter earnings to 9 million euro was also partly due to lower overall sales, a fall in the Russian rouble and more promotional spending in advance of the 2010 World Cup.
Adidas announced in January that it was closing Reebok’s office in Bolton, where the brand originated, with 55 out of 160 staff being redeployed to the company’s UK headquarters in Stockport.
Today, Adidas said Reebok’s sales had fallen 4.3 per cent but its operating margin was a negative 11.3 per cent compared with a negative 2.4 per cent in the first quarter.
Adidas saw total sales fall 2.5 per cent to 2.46 billion euro but said it expected its results to improve during the remainder of the year. The optimistic forecast led to a 6.1 per cent rise in the company’s Frankfurt-listed shares.