German sportswear and footwear manufacturer Adidas has returned to profit. In the first quarter, it reported a net profit of 170 million euros (4.3 billion crowns), after a loss of 39 million euros a year ago. Sales grew in Europe and China, mainly thanks to interest in Samba and Gazelle sports shoes. But the company is not doing well in its key market, which is the United States.
Adidas was at a loss last year when the highly profitable Yeezy shoe line ended following a split with rapper Ye, formerly known as Kanye West. Recently, however, the company has been increasing sales thanks to the popularity of the Samba and Gazelle shoe models. Sales of footwear in the first three months of the year increased by 13 percent.
Samba shoes have been sold for over 70 years. They were originally intended for indoor soccer, but soon became popular in many subcultures. Adidas reports that this shoe model is the second best-selling model of the German brand with 35 million units. The Gazelle model also has a long history behind it, which dates back to 1991.
Adidas Samba|Adidas
Adidas has taken advantage of the weakening of its much larger US rival Nike, which has lost market share and warned of falling sales. On The Edit LDN, a marketplace where sneaker lovers buy and sell limited-edition shoes, sales of Nike shoes fell by about 30 percent overall. On the other hand, sales of Adidas shoes, which are usually cheaper, increased by 80 percent compared to last year, according to Reuters, the founder and CEO of the marketplace Moses Rashid.
Adidas is losing out on a key market
The company’s first-quarter U.S. sales fell four percent after adjusting for exchange rate movements. Wholesale trade has seen double-digit declines in the region, while retailers in the region are suffering from persistently high inventory levels.
Sales in China rose eight percent on a currency-adjusted basis. Latin America in particular contributed to the improvement of the company’s economy, which recorded growth of 18 percent. Europe then reported growth of 14 percent.
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