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Adidas to sell online

Adidas is to begin selling on the internet, in a move that is likely to present a further competitive threat to its existing stockists.
The German-based sportswear group said last week that it would start selling the Adidas brand online in the Netherlands early next summer, including a limited selection of both its Originals and Sport Performance collections. The Netherlands launch will be run as a test ahead of a wider roll-out. At present, Adidas sells online only in North America. In the UK, an Adidas store is run by Littlewoods as an internet shop-in-shop.

An Adidas spokeswoman said the company intended to sell online as a complement to its retail offer. She said: “We have done and will continue to offer online retailers our products. Our own online offering should be seen as an add-on to our retail activities,” she said.

Like other international sports brands, Adidas has increasingly developed its own distribution network. In 2006, retail operations made up 15% of Adidas brand sales and by 2007 it had 500 of its own Sport Performance and Originals stores. Internet sales in 2006 only accounted for 1% of its retail turnover.

The Adidas group, which has a strong heritage in football, is performing well in the run-up to the Euro 2008 football tournament. In the nine months to the end of September, total turnover was €7.9 billion (£5.7bn), up 5% at constant exchange rates. Of that, the Adidas brand made up €5.5bn (£4bn) sales, up 8%. Operating profit rose 15% to €471 million (£339m).

The group has been boosted by particularly strong sales in Latin America, up 35%, and Asia, up 15%. The Reebok brand, which the group bought in 2006, has so far proved a disappointing acquisition, with sales of €1.8bn (£1.27bn), rising only 2% in constant currency terms.
However, profitability has been helped by combining the sourcing activities of Adidas and Reebok, resulting in cost savings of €85m (£61m) this year.

Last month, Adidas unveiled a four-year tie-up with young fashion brand Diesel to launch a new jeans sub-label, Originals Denim by Diesel. It will offer two male and two female jeans styles, to be sold from next February through Adidas Originals stores worldwide.

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