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Adidas will keep opening new stores despite Covid e-commerce surge, CEO says

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Adidas CEO Kasper Rorsted 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 has accelerated two to three years into the future … but I actually think if you asked most people, there’s a big social element about going out and shopping and just seeing and feeling the products again,” Rorsted said in an interview that aired Wednesday on “Closing Bell.”

“So, we’ll continue to build stores. We’ll announce that in March of next year, where we’re going to build and create a great store experience,” he added.

Adidas reported a 51% increase in online sales in the third quarter compared with the same period a year earlier. That followed a 93% surge in the second quarter, even though its overall currency-neutral revenue was down 34%. For the year, Adidas projects to have more than 4 billion euros ($4.9 billion) of online sales, Rorsted said, a marked improvement from roughly 1 billion euros about four years ago.

Rorsted, who has been chief executive of Adidas since 2016, said the company’s growing e-commerce strength will influence the in-store shopping experience going forward. “We think the stores are still here to stay, but coupled much closer to the online experience,” he said. “I think most people are really bored of sitting at home,” Rorsted added.

Adidas earlier this week announced it initiated a process to “assess strategic alternatives” for Reebok, including a potential sale of the brand it acquired in 2006. Rorsted told CNBC the pandemic was “not at all” the reason for Adidas’ decision to rethink its approach with Reebok. Rather, he contended that the health crisis has actually improved the underlying fundamentals for the sporting goods industry, with more people adopting casual wear while working from home and picking up outdoor recreational activities.

“I think it’s going to be a very long way back before people want to go back to a suit and brown shoes. That trend was ongoing. There’s no doubt the pandemic has really accelerated that,” Rorsted said. “Working from home and having a much more casual lifestyle is actually playing very much back into a lot of the clothing we have,” he added.

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