Adidas UK experiences a sales downturn of over £100m, despite a strong performance in its own retail stores. Key changes in wholesale and online sales contribute to this decrease.
- The company, headquartered in Stockport, reports a turnover decrease from £1.23bn in 2022 to £1.15bn in 2023.
- Wholesale revenue plummeted by £88m, and online sales likewise shrank by £37.7m.
- Retail sales, however, climbed by £14.9m, reflecting positive trends within the company’s outlets.
- Adidas projects optimism for 2024, driven by major sporting events and continued consumer interest.
During its most recent financial year, Adidas’s UK operations faced a significant sales decline, exceeding £100m, attributed mainly to a considerable decrease in wholesale and online sales. While turnover fell to £1.15bn in 2023 from the previous year’s £1.23bn, there were promising results in retail sales.
According to financial records submitted to Companies House, wholesale revenue dropped sharply by £88m, with online sales experiencing a similar downturn of £37.7m. Despite these challenges, the company’s physical retail locations saw a £14.9m increase in sales. This indicates a growing consumer preference for in-person shopping at Adidas’s own stores.
Adidas UK’s pre-tax profit suffered, falling from £37.4m to £30.8m. This was amidst a challenging economic environment marked by high inflation, rising interest rates, and geopolitical tensions. However, the company maintains a positive outlook, driven by robust consumer demand, primarily fueled by the terrace trend in lifestyle wear.
Looking ahead, Adidas anticipates a commercial boost driven by upcoming major sporting events like Euro 2024 and the Paris Olympic Games. The company is keen on strengthening its customer relations, continuing investments in product innovation, and enhancing marketing strategies across the UK. This aligns with their ongoing efforts to engage directly with consumers via their retail and e-commerce platforms.
Furthermore, despite the setbacks in wholesale and online sales, the overall group has revised its yearly forecast upwards, buoyed by better-than-expected outcomes during the second quarter of the financial year. Anticipation of an operating profit reaching approximately €1bn (£883.2m) reflects this improved outlook, adjusted from a prior projection of around €700m (£583.4m).
In summary, despite current financial challenges, Adidas UK is poised for future growth, supported by strong consumer demand and strategic market positioning.
