Nike, Adidas, PumaShoe factories closed, sporting goods giants worried about Christmas sales Can't login? Please be patient while your account is being set up!

Weeks of factory closures in Vietnam due to the corona pandemic are giving the big sporting goods manufacturers a hard time. The world's number one, Nike, is therefore already concerned about parts of its Christmas business and has reduced its sales expectations for the current financial year. Nike has almost half of its shoes manufactured in the Asian country; the south in particular is in lockdown at least until the end of the month.

The German competitors Adidas and Puma are also dependent on the factories in Vietnam: At Adidas, 40 percent of the sports shoe production came from there in the past. "We are in contact with the manufacturers to limit the impact and temporarily relocate production to other countries," said a spokesman on Friday.

Puma put Vietnam's share of its production of shoes and textiles at 15 percent. "We try to prevent delays as much as possible and, if possible, to relocate production to other countries," said a spokeswoman for number three in the global sporting goods market. Some of the factories in the south of the country have resumed operations thanks to increasing vaccination rates. "We hope that the other factories will gradually open from the end of September and throughout October."

The stock market is also under pressure

Nike CFO Matt Friend is preparing for longer-lasting problems. "Based on our experience with Covid-related factory closures, it will take time before they can reopen and ramp up production," said the manager. Ten weeks of production have already been lost and it will be months before the plants are working at full capacity again. For the current fiscal year 2021/22 (as of the end of May), Nike is therefore only assuming a mid-single-digit increase in sales; previously Friend had expected low double-digit growth. In the current second quarter, which runs from September to November, sales could even stagnate in the worst case due to the loss of production.

That alarmed the brokers. Nike shares fell 3 percent in after-hours trading. Since the record high in August, it has lost nine percent. Adidas fell 2.9 percent on Friday, Puma shares lost 1.9 percent. Almost all sporting goods manufacturers have shoes and clothing manufactured in low-wage countries in East Asia such as Vietnam and Cambodia.