Munich, Dusseldorf It was the best year in our history, ”Kasper Rorsted boasted in mid-March when he presented the results for 2019. He confidently added: “We kept what we promised.” Adidas-Chef is rarely at a loss for powerful words – including a clear compass.
And that is exactly why he and his company have now got into a very special shitstorm: When the corona crisis also hit Herzogenaurach, the Dane was forced to suspend the rent payments from his shops, wherever this is now legally possible. Despite billions in reserves. Rorsted was certain of outrage.
Like Adidas, many German and international groups are now doing it. All of their stores are closed due to the pandemic, so they want to cut costs as quickly as possible. Local rivals too puma does not want to transfer the rent for the time being, as well as chain stores like Deichmann with 1,500 shops in this country, HM with 460 shops in the Federal Republic as well as the electronics chain Mediamarkt and Saturn.
But no company is criticized for this decision as much as the sneaker manufacturer Adidas. A storm of outrage culminated on Twitter, which was by no means carried only by young trendsetters. “I always thought that managers also had social responsibility,” said automotive expert Ferdinand Dudenhöffer. Such “wild west capitalism” would make companies an enemy: “Terrible.”
Politicians such as Federal Minister of Justice Christine Lambrecht also regulated Rorsted: “If financially strong companies simply no longer pay their rents, this is indecent and unacceptable,” she said in Berlin. The Corona Aid Laws provide no basis for this. It continues to apply: “Of course, tenants have to pay their rent. If they actually experience serious payment difficulties as a result of the crisis, they can only be terminated for a limited period. “
And Minister of Labor Hubertus Heil said in the Handelsblatt interview: “I think Adidas’ behavior is irresponsible and I have no understanding for it. Adidas has made high profits in the past few years. “Now everyone should shoulder the crisis together, and nobody should duck away.
It is true that landlords cannot terminate the lease in the period from April 1, 2020 to June 30, 2020, provided that the rental debt is based on the effects of the Covid 19 pandemic. In principle, however, the tenant’s obligation to pay the rent remains.
What particularly annoys consumers on social networks: Adidas is very healthy and is now relieving the burden of the crisis on others – at least that is the accusation. Indeed, the brand with the three stripes was last shiny. The profit climbed last year by twelve percent to a good 1.9 billion euros.
It only affects 26 Adidas stores in Germany
As of December 31, the company had almost 900 million euros in cash minus all debts. The dividend should therefore increase by 15 percent, and Kasper Rorsted plans to distribute a total of EUR 800 million to the shareholders. CFO Harm Ohlmeyer also announced a share buyback two and a half weeks ago, value: up to one billion euros.
In the meantime, however, the situation has changed dramatically, Rorsted argues. Business is still reasonably normal in only three countries worldwide: China, South Korea and Japan. In Europe, North America, Latin America, many emerging markets and parts of Asia, however, the stores are closed. There, however, the group generates 60 percent of sales in normal times.
But that’s not all: there are only 26 stores in Germany, which are mainly rented out by large companies. Only four contracts affect private individuals, and these are exempt from the deferral, the group said on request. The landlords concerned, especially real estate companies and insurance companies, are very cooperative.
The thing has nothing to do with the many thousands of sports retailers through which Adidas sells its shirts, shorts and shoes in this country. Adidas has a total of 2500 stores worldwide. The deferral of the rent is also just one of many measures that Adidas must take as a precaution to protect the company and its 60,000 employees.
Puma, number three in the sporting goods industry, is similar to Adidas Nike and his Franconian arch rival. The stationary trade came to a complete standstill. It is still not foreseeable when Puma can start operating again.
“There is no turnover that is necessary to pay the rent for our shops,” said a spokeswoman. As of April, the sneaker manufacturer will therefore suspend rental payments for the time being. The company will try to find a viable solution in conversation with the landlords in Germany.
Puma is hardly criticized for this, Adidas, however, very violently. The label has even faced boycott calls since the weekend.
Perfumery chain Douglas examines the use of aid programs
For example, the two SPD MEPs Katarina Barley and Timo Wölken announced on Twitter that they would no longer buy from Adidas anymore. “As a global corporation with a profit of 3.2 billion, exploiting a protection rule for tenants in need of existence is shabby,” wrote Barley.
Wölken tweeted that the behavior of the sporting goods manufacturer was “under all sow”. Other consumers expressed similar comments.
Adidas is actually still in a comparatively comfortable situation. Other companies are already in real trouble. So the electronics retailer wants Ceconomy Apply for financial aid from the state development bank KfW because of the losses in the corona crisis. Ceconomy is the parent company of Mediamarkt and Saturn.
The Düsseldorf business has been sluggish for years. The perfumery chain Douglas has also already announced that it is considering “participating in the announced national and regional aid programs for affected companies”.
However, it is not only the large corporations that suffer from the closings, but also medium-sized companies such as the fashion company Marc O’Polo from Stephanskirchen in Upper Bavaria. Their boss Dieter Holzer is also trying to cut costs quickly: “We are talking to our landlords to find economically viable solutions for both sides,” the manager told Handelsblatt on Sunday.
The German Fashion Council, the lobbying association of the German fashion industry, wants massive help from the federal government to prevent the store from dying due to the pandemic. In an extensive catalog of claims on the crisis, the organization proposes to suspend and defer rent payments. These could be secured by bank guarantees, the proposal said.
The Adidas board has temporarily cut his salary by half. CEO Rorsted only waives 80,000 euros a month.
More: Hubertus Heil warns against loosening the measures in the corona crisis too quickly. He would like retailers to commit to reasonable collective agreements.