Adidas races ahead as Reebok unit lags
AFP · 5 Mar 2008, 08:30
Published: 05 Mar 2008 08:30 GMT+01:00
The German group said net profit had gained 14 percent to €551 million ($835 million), while operating profit rose by eight percent to €949 million. Sales were hurt by unfavourable exchange rates and grew by just two percent to €10.30 billion, the company reported in a statement.
The group's main problem however remained Reebok, which suffered a six percent drop in sales last year. Adidas said that the unit's head, Paul Harrington, would be replaced by
marketing chief Uli Becker.
For 2008, a year that will witness several major sporting events, Adidas' order backlog - a key indicator of future sales growth - was at a 10-year high, and the company said it expected net profit to gain at least 15 percent. In addition to the Beijing Olympics, the European soccer championship is to be held in Austria and Switzerland this year.
Adidas announced the acquisition of Reebok in 2005 for €3.1 billion to boost its market share in the United States and narrow the gap with rival Nike, and has invested in marketing to revive the brand's popularity.
The German company said last year that it expected sales at Reebok to return to growth in 2009, with order backlogs already showing improvement in the second half of this year.