Adidas is to restructure its regional operations following a 97% drop in net profit during the first quarter of 2009.
Share prices for the German sportswear giant dropped down 6.6%, as net profits plummeted from EUR169m (£150m) to EUR5m (£4.4m) a year, based on the January to March results.
Adidas chief executive officer Herbert Hainer said he would cut regional headquarters across Asia and Europe, close stores and consolidate the company’s wholesale business in reaction to the poor figures.
In a statement Hainer said the company had faced a number of economic and market challenges during the first quarter, but was positive about its cost cutting measures.
“Our results have been materially affected by higher input prices, currency devaluation effects and restructuring costs. Although some of these items will recur again as we go through the balance of the year, I am convinced we will put most of these effects behind us in the current year.”
Adidas hope the measures will reduce its costs by EUR100m (£88.7m).
The company launched a star-studded campaign under the name “House Party” last November featuring celebrities such as David Beckham, Katy Perry and Missy Elliott as part of the Adidas Original brand’s 60th anniversary celebrations. The integrated campaign has the strapline “Celebrate Originality.”