Will The Recession Ruin The 2010 World Cup… For Adidas?

May 15th, 2009

The recession is truly changing the playing field. Even events that consistently boost sales for companies are failing to beat the recession.

Big sportswear companies typically see an increase in sales when huge events like the World Cup come along, but this year Adidas (ADDDF) is struggling more than usual.
Even after a rough first quarter, the company is optimistic about the boost they’ll receive from the 2010 World Cup in addition to a recent management overhaul and widespread layoffs.
However, excessive supply of product along with rising unemployment and the continuing recession throughout Europe may negate any earnings increases the World Cup brings.

Adidas (a German company) reported a 52% sales increase in the wake of the 2006 World Cup.
In the first quarter of 2009, Adidas’ reported income dropped a staggering 97.2%.
European retail markets account for approximately half of Adidas’ total sales.

“In Western and Central Europe we will continue to face some tough times.” – Ingbert Faust, Analyst for Equinet

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