Adidas to Boost China Outlets by a Third With 3,000 Stores

  • Company to add new stores by 2020, plans focus on kidswear
  • Adidas to keep most of production in China despite rising cost

German sportswear maker Adidas AG will open 3,000 new stores in China by 2020, counting on rising affluence and health-awareness in the country to boost its global business.

The new stores will bring Adidas’ total to about 12,000 across 2,200 cities in China and the company will focus more on kids’ sports apparel as China eases its one-child rule, said Adidas China Managing Director Colin Currie at a briefing in Shanghai on Friday.

“More and more, we actually see optimism for growth because the amount of Chinese consumers participating in sports are tremendous,” Currie said.

Adidas is in a race with global rival Nike Inc and home-grown sports brands Anta Sports Products Ltd. and Li Ning Co. to grab demand from a Chinese middle class’s growing awareness of health benefits from exercising. China’s sports industry will expand more than 19 percent annually to 3 trillion yuan by 2025, Credit Suisse Group AG estimated last September.

The number paying to exercise rose to 164 million in 2014 from 98 million in 2007, according to a national survey conducted last year.

Adidas doesn’t see any impact on its business from China’s slowing economy, and the company has no plans for mergers or acquisitions in the country, he said.

The company plans to keep most of its production in China despite rising production costs, Currie said. About 29 percent of its apparel and 23 percent of its footwear is made in China, according to Adidas’ 2014 annual report.

Adidas’ sales in Greater China grew 38 percent to 2.47 billion euros ($2.7 billion) in 2015 from 1.79 billion euros in 2014, according to the report. Greater China now accounts for about 15 percent of Adidas’ global sales, up from 12 percent in 2014.

Sportswear companies are betting on China as the government plans to raise the sports industry’s output to account for 1 percent of the country’s economy, and it may offer subsidies and lower tax rates to promote research as well as seek foreign investment to achieve this target, according to Bloomberg Intelligence.

— With assistance by Rachel Chang, and Jing Jin

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