Adidas 2000 Annual Report Download - page 40

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36
Recovery of adidas in North America Expected to Begin
in the Second Half of 2001
Based on the order situation, sales in the first half of 2001 are
expected to remain on the decline. While apparel is beginning
to stabilize, demand for footwear is still suffering the effects of
the mixed resonance regarding the 2000 and 2001 collections.
One important exception is basketball, where the launch of the
new premium-priced shoe The KOBE has helped drive back-
logs for the category up 35% versus the previous year.
In the second half of the year 2001, recovery is expected to
begin with our most important athletic specialty retailers.
This will be supported by new product initiatives, which target
trend-setting urban consumers.
Sales Momentum Continues for adidas in Asia
The adidas brand in Asia delivered strong sales growth in 2000
with sales up 29% to c645 million despite a difficult macro-
economic environment. The largest driver of this increase was
sales improvements at adidas Japan. This represents the
second consecutive year of strong growth for the region and
further underscores the sound decision to take control of the
sales and marketing activities and serve the Japanese market
directly. In addition to this growth, Indonesia, China, India and
Singapore all had sales improvements of at least 50%. Thailand
recovered and Korea, Taiwan, Hong Kong and the Philippines
also delivered double-digit increases.
The main growth driver for this region was footwear, which grew
46% over the previous year. Apparel grew by 16%, although
strong competition from casual brands was evident.
Gross Margin for adidas in Asia Improves
Gross margin for adidas in Asia improved by 1.3 percentage
points to 46.2% of net sales. This rise was the result of
continued high margins at adidas Japan and increased own-
retail activities.
2001 Outlook for adidas in Asia is Promising
The Asian region will continue as a high growth region for
adidas in 2001. Preparing for the 2002 Soccer World Cup in
Japan and Korea will be a major priority for the year. This event
is an integral part of adidas’ strategy to extend our leading global
position in soccer. Other focal points of the 2001 strategy in
Asia will include positioning the brand to move into a leading
position in the running and basketball categories.
Order backlog development suggests growth will continue in
2001. Backlogs are up 13%, which supports the anticipated
double-digit growth in the region.
adidas in Latin America Records Strongest Sales Growth
Latin America showed the strongest sales growth for the
adidas brand. The 34% increase to c169 million was largely
driven by strong increases in Colombia, Argentina, Mexico and
Chile. Sales in Brazil showed triple-digit growth rates through-
out the second half of the year, indicating a significant recovery
in the demographically strongest market within the region.
Part of this increase was attributable to the incorporation of
formerly sub-licensed apparel sales. On the regional level these
accounted for around 4.0 percentage points of the total 34%
increase over the year.
adidas in Asia
(euros in millions) Change year-
2000 over-year
Net sales 645 29%
Gross margin 46.2% 1.3pp
Order backlogs* 13%
* At year-end
adidas in Latin America
(euros in millions) Change year-
2000 over-year
Net sales 169 34%
Gross margin 42.0% 2.0pp