Thursday, August 07 09:18:14
Adidas, the world's second-biggest sportswear firm, will increase its spending on marketing by 1 percent of sales as it seeks to halt the advance of market leader Nike following a profit warning last week.
The German group said it planned to increase its target range for marketing spending to 13-14 percent of sales from a previous 12-13 percent. Adidas spent about 12.4 percent of its 14.5 billion euros of revenue on sales and marketing in 2013.
Adidas last week cut its sales and net income targets for 2014 and scrapped its goals for 2015, blaming the move on poor performance at its golf business and volatile emerging market currencies, particularly the Russian rouble.
Chief Executive Herbert Hainer said Adidas now planned to add only 80 more stores in Russia this year, down from a previously-planned 150, with a similar figure for 2015.
That move, as well as a more promotional environment in Russia, would cut around 50 million euros from operating profit in the second half, while a planned restructuring at the golf unit would mean a hit of 50-60 million euros. (Reuters)
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