German sportswear giant Adidas released updated guidance Wednesday revealing its business activity in China has dropped 85% because of the novel coronavirus outbreak.
“Our business activity in Greater China has been around 85% below the prior year level since Chinese New Year on January 25,” said the company, adding that other markets such as Japan and South Korea have also seen a decline in traffic.
Adidas said their business in China performed strongly the first three weeks of the year, but since then there has been “a material negative impact” on operations due to the outbreak.
The company has shut down a significant number of stores – both own- and partner-operated – and has observed a pronounced traffic reduction within the remaining store fleet, according to the guidance.
Another big German sports firm, Puma, also warned warned about the impact of the virus on its bottom-line.
“After a good start into 2020, February has of course been negatively affected by the outbreak of COVID-19 [a name for the disease caused by the virus]. The business in China is currently heavily impacted due to the restrictions and safety measures implemented by the authorities,” the company said.
“Business in other markets, especially in Asia, is suffering from lower numbers of Chinese tourists.”
Both Adidas and Puma said it is impossible to forecast the overall impact of the virus at this point in time.