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Adidas today announced a major shake-up with huge job losses after its profits were virtually wiped out in the first quarter.
The sports kit maker saw post-tax profit slump 97% from €169 million (£150.5 million) to just ¤5 million as consumer demand fell dramatically as the recession progressed.
"We've faced a number of economic and market challenges in the first quarter of 2009," said chairman and chief executive Herbert Hainer. "Our results have been materially affected by higher input prices, currency devaluation effects and restructuring costs."
Sales dropped 2% to €2.58 billion, but this was flattered by the euro's strength. On a same-currency basis revenues were 6% lower.
The biggest fall in sales came in football kit and boots which fared badly compared to the first quarter of 2008 when sales were boosted by the UEFA Euro championship.
The worst-affected geographical area was North America where sales crashed 17%.
Adidas admitted it had got its planning wrong by budgeting for much greater demand in the first half of 2009. This left it with stock 18% higher than a year ago.
The company also said it had problems collecting money from some of its customers, particularly in Latin America.
A radical cost-cutting plan has been launched aimed at saving ¤100 million a year. Jobs will go at Reebok, Rockport and TaylorMade-adidas Golf with a complete tier of management being removed.
