Kasper Rorsted, CEO of Adidas, told CNBC that the German sportswear company will continue to invest in brick and mortar stores despite the boom in e-commerce sales during the coronavirus pandemic.
“There’s no doubt that online business has accelerated in two to three years … but I think if you ask most people, going out and shopping and just seeing the products again is a great social element and to feel, “Rorsted said in an interview that aired on Closing Bell on Wednesday.
“So we’re going to keep building stores. We’ll announce that in March next year, where we’re going to build and create a great store experience,” he added.
Adidas posted a 51% increase in online sales in the third quarter compared to the same period last year. This followed a 93% increase in the second quarter, despite total sales decreasing 34% on a currency-neutral basis. For the year, Adidas plans online sales of more than 4 billion euros (4.9 billion US dollars), said Rorsted, a significant improvement from around 1 billion euros about four years ago.
Rorsted, Adidas CEO since 2016, said the company’s growing e-commerce strength will impact the in-store shopping experience going forward. “We believe the stores are still here, but much closer to the online experience,” he said. “I think most people are really bored of sitting at home,” added Rorsted.
Adidas announced earlier this week that it has initiated a “strategic alternative evaluation” process for Reebok, including a potential sale of the 2006 brand. Rorsted told CNBC that the pandemic was “not at all” the reason Adidas decided to reconsider its approach with Reebok. Rather, he claimed that the health crisis had actually improved the underlying fundamentals of the sporting goods industry, as more and more people wear casual clothing while working from home and taking up outdoor recreational activities.
“I think there will still be a long way to go before people want to get back into suits and brown shoes. This trend continued. There is no doubt that the pandemic really accelerated this,” Rorsted said. “Working from home and having a much more casual lifestyle actually plays a huge role in a lot of the clothes we have,” he added.