Financial reports are coming out for the 1st quarter of 2009 and it’s not looking good for many in youth culture markets and sportwear. Adidas reported May 5 that its net profit from the first quarter fell 97%, with North America being particularly hard hit. The German-based sportswear brand said that fell to 5 million Euros profit from 169 million Euros in the same quarter of 2008.
This pushed Adidas stock down another 11%.
According to Adidas’ press release, “We’ve faced a number of economic and market challenges in the first quarter of 2009,” said Herbert Hainer, Adidas’ chief executive.
“Our results have been materially affected by higher input prices, currency devaluation effects and restructuring costs,” Hainer said.
Adidas, who also owns Reebok which had trouble previously, said it will get rid of 300 jobs in management in Europe and Asia and will combine into a joint operation Reebok and Adidas. This is after 700 jobs were eliminated from Reebok and their other property, TaylorMade Adidas Golf, in Latin and North America earlier this year.
Adidas is looking forward to the 2010 Soccer World Cup to boost sales, just as the 2006 World Cup in Germany boosted Adidas sales among soccer and sports fans.
Ed Hardy Gets Infusion
Ed Hardy, the tattoo-artistry-based apparel brand which seems to be everywhere, including hosting its own trade show, and having a snowboarding hardgoods line, got a cash and stock infusion when Iconix, owners of Candies, Rampage, Mossimo and Ocean Pacific, bought a 50% stake in the brand for $17 million. Given all of the changes that took place with Ocean Pacific over the years, especially once Iconix came into the picture, it will be interesting to see just how much bigger Ed Hardy will get.
Primemedia Titles
Another sad story in the world of magazines going under, Source Interlink, owners of my old alma maters Snowboarder, Powder, Surfer, Skateboarder, and Bike, has filed for a pre-packaged Chapter 11 bankruptcy on April 28. The pre-package Chapter 11 will deal with writing off some $900 million in debt, most of which was tied to their $1.2 billion acquisition of Primemedia in 2007, which owned the titles mentioned above. Source Interlink also publishes Hot Rod and Motor Trend magazines.
