At the end of February, Puma boss Gulden had hoped for a strong year, now he has to apply for government aid.
Munich Up until a few weeks ago it worked puma As good as never before. Last year, sales increased by almost a fifth, and profits rose by as much as 40 percent. “This achievement reflects the international potential of the brand,” emphasized CEO Björn Gulden at the end of February.
With the corona crisis, however, the outlook for the sports brand has deteriorated extremely. The big leap that the manager had promised for this year is unlikely to become anything.
Instead, the former professional soccer player has to save and take out loans to make ends meet. The company, which is listed in the MDax, works with its bank consortium, which provides additional financing, the company affirmed.
These institutes in turn would use the state development bank KfW to be able to provide more money. “This is about liquidity at customary financing terms,” said a Puma spokesman.
Puma is taking the same path as the local rival Adidas, albeit at a significantly lower level. While Adidas collects three billion euros from the banks, it is likely to be only a three-digit million amount at Puma.
The group does not officially state a sum. The sneaker manufacturer Adidas listed in the Dax is four times the size of Puma.
Same costs with less sales
Both sports groups, however, have the same problem as the big US competitors Nike and Under Armor: You only get a fraction of your normal sales. Shops in large parts of the world are closed, retailers cannot or do not want to pay for goods that have already been delivered.
However, the costs remain almost unchanged. For the brands, this essentially means staff and rent for offices and shops. The factories are not owned by them. However, there are purchase obligations for ordered items.
At the end of February, Gulden was still hoping for a strong year. The goal for 2020 is an increase in sales of ten percent and a significantly higher operating profit, said the manager.
At 5.5 billion euros, the sneaker manufacturer had the highest sales ever. The operating profit had climbed to 440 million euros, the bottom line was 262 million. Gulden even slightly exceeded his forecast, which had been increased twice in the past year.
It is not to be expected this year that he will have to correct his forecast, on the contrary. In addition, Gulden has decided to wait and see with the latest results. Instead of April 30, as planned, he now wants to present the quarterly figures on May 7. The Annual General Meeting in Herzogenaurach should also take place on the same day – due to Corona, however, without visitors on site.
Analysts see Puma facing difficult months. So the British bank HSBC the price target for the next twelve months has been significantly reduced from 90 to 67 euros.
In the long term, however, the situation remains promising, analyst Erwan Rambourg said. In addition: Since the beginning of the year, the papers have already lost around 15 percent in value.
Long-term investors remain comforted: the price has more than doubled in the past five years.
More: Adidas is getting three billion euros from the development bank and major banks. Two-thirds of the remuneration of the Board of Management is deleted, and the dividend is also canceled.
MunichAmazon? No thanks! Christian Schneidermeier has been concentrating on specialist shops for years. The boss of the popular mountain sports specialist Ortovox consistently refuses to shop online. His highly functional clothing and avalanche transceiver are only available from specialists who offer proper advice.
Now the manager fears that many of the shopkeepers will have to give up because of the corona crisis. It would be a disaster if his distribution network collapsed overnight. Schneider Meier is therefore breaking new ground. He provides merchants with online vouchers that they can pass on to their customers. This is supposed to help people shop in the Ortovox internet store.
A quarter of the revenue then flows to the business owners. “We want to maintain the diversity of the small specialist retailers. That has always been our basis and should remain so, ”explains Schneidermeier.
Like Ortovox, many sports brands are trying to support retailers these days. With good reason: Thousands of shopkeepers fear for their existence because they hardly sell online, but their shops remain closed indefinitely.
The outdoor chain McTrek had to file for bankruptcy on Thursday. The branch operates 43 stores and employs 420 people. The sports brands are therefore afraid of future companies like Amazon or Zalando to be instructed.
Round table planned
The Sport 2000 dealer association is therefore trying these days to get shopkeepers and brands at one table. Managing director Markus Hupach emphasizes that it is about concluding a solidarity pact.
There is a lot to discuss: for example, the question of how the masses of items currently stacked in the warehouse can be dealt with with the lowest possible discounts.
There should also be talk about when new products will be launched. Because with every novelty, the shirts, shorts and shoes that are not yet sold are worth less. Sport 2000 invited leading running providers to the first conversation, among others Asics, Brooks, New Balance, On and Saucony.
Benedikt Böhm was one of the first in the industry to respond. The head of the Alpine equipment supplier Dynafit announced in March that the 2020 summer collection would also be available next year. He wants to prevent a price battle in the next few months. “This is a clear sign to the stores that our goods are not getting old,” emphasizes Böhm.
But the brands themselves are also under pressure. Because their own logistics centers are full, and the autumn collection will soon come from the factories in Asia. The dealers, on the other hand, cannot currently buy anything. You simply lack the money.
“We have agreed with almost everyone to first suspend the upcoming deliveries until our OK comes,” says Martin Kerner from the Karlsruhe outdoor specialists base camp. “They are forced to join in the hope that an OK will come.”
But that is by no means certain. Because nobody in the industry knows whether customers will buy again as soon as the exit restrictions are lifted. Therefore Kerner is also careful and carefully thinks about what he has in store: “The last thing I want is no or the wrong goods when the shop is open again.”
Numerous sports brands now offer retailers long payment terms, sometimes up to five months. “It sounds good at first, but the day will come when you have to pay,” says Kerner.
70 percent less running shoes
But at the moment people are very unsettled. Since gyms and club sports are currently not an option, many people go jogging. Nonetheless, sales of running shoes in the US dropped 70 percent, according to the latest data from the NPD Group’s market researchers.
This doesn’t even include the recent worsening of the epidemic in America, just the week ending March 21. According to the NPD Group, business with sports equipment for young people has even declined by 90 percent, for example kick boots or baseball shoes. NPD analyst Matt Powell warns that the online stores could not even compensate for the shortfalls in local shops.
The picture in Germany is similar to that in the USA. “Business is still going on in online trading, but at different levels depending on the product group,” says Ortovox boss Schneidermeier. The sneaker manufacturer puma According to the Internet sales do not even reach ten percent of the usual revenue.
Brands like Puma or Adidas but are not as dependent on retailers as smaller labels. You run many of your own shops.
Even medium-sized companies like Ortovox do not have too much scope to stand by the merchants: “We support the dealers as much as possible. On the other hand, of course, we also have to pay our suppliers, ”says Schneidermeier.
Typically, the company leader would sit with dealers in May to discuss spring 2021 orders. Tailor Meier believes that this is currently not even an option.
Because of the crisis, the manager has meanwhile also adjusted the contracts with the dealers: temporarily, they can sell the Ortovox equipment on platforms such as Amazon. With all aversion to the Internet giant: At the moment the dealers can use every turnover, no matter where it comes from.
View of the Dax curve in the Frankfurt trading hall.
Dusseldorf The Dax reacted relatively calmly to the job cuts in the USA on Friday. After an initially unsteady ups and downs, the leading German index fell only slightly after the US labor market data was published and closed 0.5 percent lower at 9526 points. in the Course of the week is that Minus at more than one percent.
Dusseldorf Weak US labor market data hardly affected the Dax at noon. In the morning, investors had already reacted calmly to the weaker than expected economic data, the Dax was only slightly in the red. Shortly before the release of the US labor market data, the index had even worked up to the previous day’s level. It currently stands at 9574 points – three points up.
On Friday, investors primarily looked at the new US job market data released at 2:30 p.m. Central European Time. Last month, 701,000 non-agricultural jobs were cut in the United Statesthe government announced on Friday. Economists surveyed by Reuters had only expected 100,000 in March, after 273,000 jobs were created last month.
In the past two weeks alone, a total of around ten million Americans have already applied for unemployment benefits, a historic figure. And the impact of these initial applications can hardly be seen in the figures now published. Therefore, these are not very meaningful CommerzbankEconomist Bernd Weidensteiner warned before the publication: “The cut-off date for the so-called ‘payrolls’ was before the initial applications exploded. These figures will only be fully reflected in the next month. “
For the Commerzbank analyst Antje Praefcke, the unemployment rate in the USA could easily rise into the double-digit range in April and thus outshine everything that the Post-war history has to offer at highs. The previous high was 10.2 percent in 1982.
How much the corona crisis is affecting the global economy can be explained by a number: According to Handelsblatt calculations, the 50,805 companies listed worldwide lost 19.4 trillion euros in just six weeks. So far, this decay has been unique in such a short time. With this sum, all of Europe’s public debt could be repaid, and there would still be five trillion euros left.
New economic data from China can not inspire the markets, but signal relaxation. The service sector there recovered only slowly in March from the countless shop closures in the midst of the coronavirus outbreak. The Caixin / Markit Purchasing Managers’ Index (PMI) for the service sector, released on Friday, rose from its record low of 26.5 in February to 43 in March. Nevertheless, it was the second weakest value since the start of the survey at the end of 2005. Values below 50 points mean that activities have shrunk.
Over the course of the day, purchasing managers’ indices in Europe also became published on the service sector. These showed that the corona crisis hits service providers in Germany and in the euro zone with even greater force than previously assumed. The purchasing manager index for the German service sector fell to 31.7 points in March from 52.5 points in February. This is the most significant slump since the company survey began in 1997 and at the same time a record low. An initial estimate had only dropped to 34.5 points. The barometer, which has received a lot of attention on the financial markets, only signals growth from 50 points.
The service sector is particularly hard hit by the corona crisis, since the travel and tourism industry, the hospitality industry and the leisure industry suffer massively from the restrictions imposed. “The impact of the pandemic and the resulting efforts to curb it are all too clear given the unprecedented slump in the German services sector in March,” said Markit economist Phil Smith.
The barometer for service providers in the euro zone was also worse than expected. It dropped to 26.4 from 52.6 points in the previous month – also a negative record. Here the preliminary result was 28.4. “Our data indicate a slump in the euro economic output of almost ten percent,” said Markit chief economist Chris Williamson. “Worse seems inevitable in the near future.”
No country was able to escape the downward trend. “But the particularly drastic drop in the Italian service index to 17.4 points gives a foretaste of what the other countries are facing due to increasing closings, curfews and tighter controls,” said Williamson. Employment is currently not falling as rapidly as during the financial crisis. However, unemployment is likely to skyrocket in the coming months.
Look at other asset classes
On Friday, oil prices initially fell significantly from the interim high on the previous day. In early trading, the price of a barrel (159 liters) of the North Sea Brent and US WTI fell by around five percent to $ 28.40 and $ 24, respectively. But within an hour the picture turned again and prices returned to Thursday’s profits: Meanwhile, the Brent price is up about eleven percent at $ 33.34, WTI is up almost seven percent and costs $ 27.09.
On Thursday, US President Donald Trump indicated cuts in funding and thus an agreement in the price war between Saudi Arabia and Russia. After a denial by the Russian government and a lack of confirmation from Riyadh, prices quickly dropped again.
“Trump has to stabilize the oil price, otherwise a wave of bankruptcies awaits us in the oil sector”
Earlier, the Russian news agency Ria, citing the Azerbaijan Ministry of Energy, reported that Opec + would advise on its funding policy on Monday. The talks should be conducted as part of a video conference. All Opec + countries are expected to participate.
Commerzbank analysts are skeptical that the countries will agree on such large cuts. They lowered their Brent year-end forecast to $ 40 a barrel from $ 50 previously.
Look at individual values
Beiersdorf: The shares give 0.3 percent because of the manufacturer of Tesa adhesive products and Nivea-Cream has withdrawn its forecast for 2020 because of the corona crisis. So far, the stock has shown a stable stock market development compared to the other 29 DAX stocks and has only lost 15 percent or less since the stock market high on February 19 than the other stocks in the leading German index.
MTU: The shares of the engine manufacturer, on the other hand, have had the biggest loss since the record high on February 19, at minus 50 percent. And today, Friday, the decline continues with a drop of 2.7 percent.
Shop pharmacy: Online shops are among the winners of the corona crisis, including the online drug retailer Shop pharmacy. The months of January and February were already very strong, but the outbreak of the corona virus then gave a further boost in March. The number of active customers grew by 300,000 to five million in the first three months. The company now expects annual sales to be at least 20 percent above the previous year. The share continues to rise by a good six percent.
Puma: The sporting goods manufacturer is cutting the dividend for the past year because of the corona crisis. The shutdowns ordered by the authorities to contain the risk of infection in almost all parts of the world would have led to a drop in sales and a significant decrease in the operating cash flow. It is currently not foreseeable how long this situation will last. The stock loses almost four percent. The number three in the global market for sports shoes and clothing wanted to distribute 50 cents per share, a total of around 75 million euros. puma had already cut board salaries for April and registered short-time work.
What the chart technique says
The larger chart shows: From the record high of 13,795 points in mid-February, the Dax dropped to 8255 points in mid-March. The subsequent countermovement ended at 10,137 points. A normal correction of this interim increase should end at 9196 counters at the latest.
A further, rather short-term support was briefly undercut on yesterday’s trading day. With 9337 points, the Dax marked a new low of the past seven trading days. A warning shot that it could quickly go down again. According to the Düsseldorfer Bank, the Dax should definitely go back into crisis mode HSBC again at courses below 9070 points.
On the upside, the small downward price gap from last Tuesday is still slowing down. Such downward price gaps arise when the daily low of the previous day is above the daily high of the subsequent trading day. The daily low on Tuesday was 9703 points, the following high of Wednesday was reached at 9686 points.
The important brands on the top are currently a long way off. The decisive factor is the space between 10,138 and 10,391 points inclusive. Among other things, there is the low of December 2018 with 10,279 points, the starting signal for the rally until mid-February 2020 with the previous record high.
“This is the decisive hurdle in chart technology, skipping it would put the German standard values on a fast recovery path,” say the technical analysts at Düsseldorf-based bank HSBC.
Frankfurt Sparkasse President Helmut Schleweis raises the alarm. Many companies in need of help in the corona crisis could not access the support programs of the federal and state governments, he warns in the Handelsblatt interview. “Some companies will not be able to help with the existing funding programs.”
As part of the loan program of the state development bank KfW, only those companies could be granted loans that are expected to be able to repay the loan within five years, said Schleweis. “This is currently not the case for many companies from industries that are suffering particularly badly from the corona crisis.”
Companies that are very much dependent on current sales and have low reserves are particularly affected. These included companies from the areas of gastronomy, hotels, event management, catering as well as from the sectors of travel, traffic, logistics, tourism and aviation.
These companies often do not get promotional loans, “even though they have a working business model if the economy starts up again after the corona crisis,” said Schleweis. “Because, unlike many manufacturing companies, they cannot make up for the lost sales in the crisis. After all, you can only rent a hotel bed once per night. ”
If such companies are not to fall through the cracks, Schleweis believes that politicians will have to take additional measures. “For such companies, help other than loans is needed to bridge the corona crisis,” says Schleweis. “Direct grants from the state would be conceivable.” Another option would be 100 percent guarantees for loans that would only have to be repaid in the very distant future. The state currently assumes 80 to 90 percent of liability as part of the KfW loan program.
The word of the DSGV boss has weight. The 378 savings banks are market leaders in business with small and medium-sized companies in Germany. At the end of last year, the institutes had granted loans of € 444 billion to companies and € 364 billion to private individuals.
Read the full interview here:
Mr. Schleweis, many companies are facing existential difficulties due to the corona crisis. 20 percent of German companies even fear bankruptcy. How big is your customers’ need? The savings banks have received around 300,000 inquiries from corporate customers in the wake of the corona crisis. In about half of the cases, we were able to find an initial solution together with the companies.
Are companies particularly concerned about the federal and state funding programs? This impression sometimes arises in public, but is still premature. So far, it has mostly been about dealing with existing loans. In many cases, the savings banks have suspended repayments and interest payments on loans for several months. In addition, thousands of companies have drawn on their existing lines of credit, securing additional liquidity. But of course we also talk to customers about government support programs.
As part of a KfW special loan program, the state assumes 80 to 90 percent of the liability, depending on the size of the company. The interest rate is also cheaper. The funds are applied for, processed and paid out via the house bank. What experiences have the savings banks made with this program so far? Most companies know that they are dealing with loan programs here, i.e. the funds have to be repaid. Many companies are therefore still considering whether the program fits their needs and will first discuss the situation with their tax advisor. An example of a savings bank that I spoke to recently: It received 850 inquiries from companies, but so far only ten specific loan applications to KfW. The situation is similar for many other houses.
Why is there so little interest? The KfW program was finalized just a week ago. I am certain that the number of loan applications for the various federal and state funding programs will increase exponentially. But it is also clear that some companies will not be able to help with the existing funding programs.
Berlin’s Senator for Economic Affairs Ramona Pop has called on the banks to be more committed to combating the consequences of Corona. “You can take a risk of ten percent in the books,” she says. One thing must be clear to everyone who expresses himself politically these days: KfW and most of the state development institutes have launched credit programs. Grants are only given to the self-employed and small businesses. This means that customary banking standards and a credit and risk assessment by the house bank are mandatory. The house bank’s risk assessment must relate to 100 percent of the loan volume and not only to a liability share of ten or 20 percent. If we do not do this properly within the framework of the funding guidelines, KfW will refuse to accept liability. Not everyone who currently makes public statements seems to be aware of this.
Why is the KfW loan program unsuitable for many companies? Only companies that can be expected to repay the loan within five years can receive loans under the KfW program. This is currently not the case for many companies from sectors that are particularly hard hit by the corona crisis. This particularly affects companies that live very heavily from cash flow, i.e. ongoing sales, and can hardly make up for lost business.
Which industries are you referring to? When it comes to gastronomy, hotels, event management, catering as well as in the travel, transport, logistics, tourism and aviation sectors, many companies make a living from their ongoing sales, and the margins are relatively low. Such companies often also have relatively little reserves. These companies often have problems with existing credit programs, even though they have a working business model when the economy starts up again after the corona crisis. In contrast to many manufacturing companies, they cannot make up for the lost sales in the crisis. You can only rent a hotel bed once per night.
What can you do to help such companies? You have to see a problem: the easiest way for companies to get promotional loans that they need the least. The companies that are currently most in need of help are often not suitable for promotional credit programs. Assistance other than credit is needed for such companies to bridge the corona crisis. Direct government grants would be conceivable. Another option would be 100 percent guarantees for loans that will only have to be repaid in the very distant future.
Some bank representatives have had intensive discussions with KfW and politicians as to whether the state should assume 100 percent of the liability for aid loans. Would that be a solution? With a state liability of 100 percent, we would no longer talk about a normal credit process, we would almost be in the area of benefits. That can be an option. There, however, one would then have to free the house banks from the tight shackles of normal lending processes.
Some family entrepreneurs criticize the fact that they should be liable for a promotional loan with their private assets, including their home and old-age provision. Can’t banks foresee this in the corona crisis? Obviously, some understood political communication so that the state was responsible for everything. That’s not the case. The state promotional institutes require the house banks for promotional loans that they comply with banking standards. For this reason, joint liability by entrepreneurs, for example, is not an idea of the house banks, but standard lending standards customary in the industry.
Direct state aid, which does not have to be repaid, is available for small businesses and so-called solo self-employed. How does this program work? The whole thing is regulated at the level of the federal states and works very differently. In Bavaria, Baden-Württemberg or Brandenburg, for example, it works extremely well. Funding institutes in individual federal states, on the other hand, were not yet structurally adequately prepared for the flood of applications. However, we expect that there will be reworking there in the next few days and that the solo self-employed nationwide will receive uncomplicated money.
How do the savings banks handle the grants? As soon as we have a confirmation from the responsible state authority, we pay out the money unbureaucratically. We will ensure that government grants are not offset against possible arrears at the savings banks. They are therefore fully available to customers. We are currently working flat out to ensure this is technically ensured.
Many private customers are also facing financial difficulties as a result of the corona crisis. How do you deal with that? The savings banks have been offering private customers to suspend loan repayments since March 26. This applies to installment loans as well as real estate financing. The prerequisite is that Corona has lost revenue and customers cannot pay otherwise. We trust our customers that they will not use this instrument inappropriately. Customers only have to answer two questions online with one click. To date – Monday morning – 124,000 people have made use of this opportunity. For many it is a great relief.
The association of PSD banks has demanded that politicians should not only help self-employed people with non-repayable grants, but also private individuals and families. What do you make of it? The more people stay on their wages, the less financial worries they have to worry about. Stabilizing the economy and businesses must therefore be a priority. Anyway, I want to say that the programs of German politics are right and unprecedented. If there are still problems in parts, this does not change their correctness. Then you have to readjust quickly.
Companies react differently to the crisis. Adidas, puma, HM and Deichmann have announced that they will suspend rental payments in the corona crisis. Are there similar considerations at the savings banks? Suspend rent payments – at savings banks? (laughs) I think that’s out of the question. Political emergency measures are always aimed at those in our society who are currently unable to help themselves. I think it is impossible if this is interpreted as an invitation not to stand by the commitments that have been made. Social responsibility and solidarity at this time means doing what you can do yourself.
How high will the savings for the savings banks be from the corona crisis? One cannot judge that seriously at the moment. The savings banks have used the past good ten years to increase their pension reserves and thus be prepared for difficult times. We need this cushion now and can do what we are there for even in a crisis: help our customers.
Should, in times of crisis, do savings banks have to accept red numbers in order to help companies? It is not our goal to be in the red, but it cannot be ruled out. We are in a situation where we learn exponentially every day and have to reassess the situation again and again.
The situation in the savings bank sector was tense even before the corona crisis. Now the burden of the corona crisis is added. Many reform efforts, such as the creation of a central institute, have been put on ice for now. How bad is the savings bank sector? Now is not the time to take care of our internal structures. Now our customers need our help – that and only that has priority. Employees are currently extremely active – in the branches that are still open, in the home office and sometimes with parallel childcare. And the feeling of togetherness in the Sparkassen family is impressive. However, we will not arrive in the same world from which we started after the crisis. It’s going to be tough, but I’m sure we’ll defeat the corona virus. After that, we will probably have a clearer view of what our customers need and how we need to develop our group as a result. There is no question that there is a great need for further development. The savings bank sector is economically stable and ready to adapt to the future needs of customers.
Mr. Schleweis, thank you very much for the interview.
More: The German savings banks want to fight against a financial crisis with all their might.
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.
Dusseldorf The Dax was back in the red at the end of the day and was down 0.4 percent at 10,439 points. The Euro Stoxx 50 also did not make it into the profit range and also closed 0.4 percent lower at 2756 points.
Both indices were able to reach their interim positive daily high – the Dax had 10,761 points and the Euro Stoxx 502999 points – do not hold until the markets close. The renewed downward moves on Wall Street pulled both stocks into the minus in the afternoon.
Accordingly, the hope of measures by governments and central banks to combat the economic consequences of the corona pandemic only had a short-term effect on the German stock market. As is usual in times of crisis, investors react to relevant news with hectic purchases and sales. A surprising rate cut in the UK caused European indices to rise.
At times, the stock markets were given further impetus by reports, according to which ECB chief Christine Lagarde announced measures of the central bank in a video conference with the 27 heads of state and government of the EU on Tuesday evening. The ECB meets on Thursday.
Lagarde warned the heads of state and government against the fact that the problems caused by the corona virus will not make it as far as it did in the financial crisis a good ten years ago. At the conference call, the ECB president informed the interlocutors of the dynamics of the current situation and urged them to act quickly, as informed circles confirmed. The Bloomberg news agency had previously reported on this.
One topic was said to have been possible credit guarantees from the member states. A major concern of the ECB is that banks could restrict lending in the current situation. The central bank can support lending by providing cheaper financing. The biggest obstacle, however, is likely to be that the banks fear increasing risks, for example due to production losses at companies, and therefore remain cautious. It would help here if the states covered certain risks. Another idea is to temporarily suspend guidelines that prohibit state aid.
EU Commission President Ursula von der Leyen has already announced a fund of 25 billion euros after discussions with the leaders of the 27 EU countries. 7.5 billion of these are said to be available immediately.
In response to the economic consequences of the corona virus, the Bank of England cut its base rate on Wednesday by 50 basis points to 0.25 percent. Even though the effects of the economic shock from the Covid-19 virus disease are highly uncertain, the economy in the UK is likely to weaken significantly in the coming months, the central bankers warned.
Bank of England cuts interest rates
The British stock index FTSE initially rose two percent as a result of the interest rate cut, then turned negative by 0.2 percent. The British pound initially weakened on the foreign exchange market, but later recovered. The dollar’s currency rose 0.2 percent to $ 1.2939.
“The central banks are now helping out. That’s a good thing, because it shows willingness to act, ”said Thomas Gitzel, chief economist at VP Bank. “However, monetary policy can currently only help to a limited extent. Companies, especially small and medium-sized companies, need access to liquidity. This has to come from the states. In Europe there is a relatively dense network of government development banks. ”
Italy also plans to increase aid to the troubled economy for the fourth time in a month. Prime Minister Giuseppe Conte named a sum of 25 billion euros that is available for this. The Milan stock exchange initially rose 2.4 percent, then briefly turned negative and then ended up again at 0.3 percent.
Italy is suffering from the corona virus like no other country in Europe. The number of infected was over 12,000 on Wednesday evening, 827 people died from the virus. A travel ban applies to the whole country.
Trump is not yet delivering
The US stock markets resumed their downward trend on Wednesday. After the WHO officially declared the corona virus a pandemic, prices slipped even further than at the start of trading. Shortly after the announcement, it was almost five percent for the Dow Jones, about four percent for the Nasdaq and the S&P 500 moved to around 4.5 percent.
Previously, Dow Jones, Nasdaq and S&P 500 started with losses of up to two percent. With this, investors reacted to the behavior of Donald Trump, who did not appear himself at the highly anticipated press conference on Tuesday, but instead sent his deputy Mike Pence. This is to coordinate the measures and reported on Trump’s talks with Congress representatives. No concrete measures were presented.
Investors are so nervous this week because the fear of the economic consequences of the corona virus is causing the oil price war between Saudi Arabia and Russia. The prices for the raw material dropped again on Wednesday: The barrel (159 liters) of the North Sea variety Brent cost $ 35.95, 3.5 percent less than the previous day. The Saudi state-owned company Saudi Aramco announced that it plans to increase its production by one million barrels to 13 million barrels a day. Fearing dwindling profits, investors withdrew from the world’s largest oil producer. Shares fell 6.6 percent on the Riyadh stock exchange.
In view of this mixed situation, many investors may find it difficult to keep their nerves. “We strongly advise you not to sell out of panic and fear because no one knows the scale of the virus or the oil price war,” said Sandip Bhagat of Whittier Trust on Bloomberg TV. “We know that the price adjustment will be slow, painful and lengthy.”
What the chart technique says
What in the Dax chart technically speaks for a calming in the coming trading days: Meanwhile, it is more than 15 percent below the 200-day line, the indicator for the long-term trend. The Frankfurt benchmark last reached such a gap in December 2018, followed by significant price increases.
Almost all technical indicators have reached negative extreme values, which signals a strong countermovement. However, yesterday there was a new correction low of 10,424 points, an indication of a weak market. A first relaxation signal would only be a trading day without a new low.
Look at the individual values
Sporting goods manufacturer: At Adidas theThe company from Herzogenaurach warned when submitting its annual balance sheet that sales in the People’s Republic in the first quarter were 800 million to one billion euros lower than in the previous year due to the corona virus. The Adidas-Share lost 9.1 percent and was the biggest Dax loser. The rival puma gave up hope that the situation around the virus outbreak would quickly normalize again. Puma stocks fell 4.5 percent.
Also the shares of the US sporting goods manufacturer Nike were under pressure after the rivals’ gloomy outlook. The paper slid violently by almost five percent to $ 84.01 at the opening in New York.
Lanxess: The corona virus crisis has left the specialty chemicals company Lanxess Traces in the balance sheet. In the current financial year, earnings are therefore expected to be between EUR 50 and 100 million. Even though Lanxess is expecting a stable operating business development in 2020, an overall decline in adjusted operating profit (Ebitda) to 900 million euros to 1.0 billion euros is expected.
For the first quarter, burdens of around 20 million euros are currently expected. In the past year, adjusted operating profit rose by a good three percent to EUR 1.019 billion. Lanxess thus achieved its forecast. The Lanxess papers recently gained 0.1 percent.
Hannover Re: The reinsurer increases the dividend after a record result in 2019. The distribution of profits to shareholders, including the special dividend, is expected to increase to EUR 5.50 (previous year: 5.25) per share. The world’s third largest reinsurer increased its surplus last year by a fifth to 1.28 billion euros, the reiterated Hannover Re the preliminary figures presented in early February.
The company also kept its forecast of a consolidated profit of around 1.2 billion euros this year and a growth in currency-adjusted gross premium of around five percent TalanxDaughter stuck. Hannover Re’s shares initially rose, but then lost about 2.1 percent.
“When planning wealth, the rule is: never get out completely!”
Handelsblatt analyst check
The US investment bank Goldman Sachs has included the Roche share in its “Conviction Buy List”. The rating was left on “Buy” with a target price of CHF 400. The growth prospects for the European pharmaceutical sector are largely unaffected by the latest negative factors, analyst Keyur Parekh wrote in an industry study available on Wednesday. The shares of Sanofi and Roche relatively safe haven in the current storm. Roche in particular is characterized by its very defensive profile.
Many want to recognize the contours of Adolf Hitler on a shoe model from the German manufacturer Puma. Now there are hailing Nazi allegations online.
There is currently a lot of discussion on the Internet about a sneaker from the sports brand Puma. Resourceful users want to have discovered Adolf Hitler’s portrait on the “Storm Adrenaline” model. You can see this when you look down on the tips of your shoes. Puma should therefore sympathize with the Nazis, according to the accusations.
Nazi allegations against Puma
The shoe comes from the autumn and winter 2019 collection. It is available in various color combinations. The black and white variant in particular is said to evoke associations with the Nazi dictator. Many see the black elements over the toes and the instep of Hitler’s hair and the distinctive mustache. Puma has not yet commented on the allegations.
Many users try to prove Puma’s alleged Nazi sympathy with the NSDAP past of company founder Rudolf Dassler. Dassler and his younger brother Adolf founded the shoe factory called Gebrüder Dassler before the Second World War. Both joined the National Socialist German Workers’ Party (NSDAP) in 1933. Rudolf later said that he had joined the party for economic reasons.
During the Nazi era, there was a break between the two brothers. While Adolf – Adi for short – founded the Adidas shoe brand, Rudolf Puma launched. The two brothers remained at odds until death.
But not everyone recognizes Hitler’s portrait on the sneaker. Some Russian users are more likely to see a similarity to the Russian writer Nikolai Gogol:
Frankfurt Was that it? Many investors ask themselves this question after the nerve-wracking past two weeks. After the corona panic the Dax At the end of February, the bottom line cost twelve percent, the first week in March went down.
On a weekly basis, the Dax lost another 2.9 percent. In the meantime attempts to recover up to just under 12,300 points failed. The Dax ended the week at 11,542 points, the lowest close in nearly seven months.
The stock exchanges on Wall Street have held the bottom line for the past five trading days – but they have fluctuated as much as they have not for a long time. As a result, investors are probably not able to take a deep breath yet. “Short-term high price fluctuations can still be expected,” says Manfred Bucher, equity strategist at BayernLB.
Michael Bissinger, equity strategist at DZ Bank, also warns: Until the damage caused by the virus can be quantified, new price declines on the equity market threaten. For investors this means: Buckle up on the roller coaster.
But investors have a glimmer of hope, namely the European Central Bank (ECB). The euro central bankers meet on Thursday. ECB chief Christine Lagarde has already issued a statement that the ECB will “closely monitor” the situation and take “appropriate measures” if necessary.
Will the ECB have to take action?
This puts the ECB under a certain constraint. The markets are already expecting the central bank to cut the key rate that is currently decisive for them – the deposit rate for bank overnight deposits – by 0.1 percentage point to minus 0.6 percent.
In addition, according to Cem Keltek, bond strategist at Commerzbank, expect the ECB to expand its bond purchase program. Since November, the ECB has been buying bonds, especially government bonds, for € 20 billion each month.
The surprising Fed rate cut on Wednesday was fizzled out on the stock markets. The US stock markets even dropped significantly after the rate cut. The Fed cut the key lending rate to banks by half a percentage point to a range between 1.00 and 1.25 percent.
Well-known US economist Larry Summers, formerly Treasury Secretary and at times a candidate for Fed leadership, criticized the Fed. She risks “scaring people with their rate hike.” He also accused her of wasting her ammunition. It is therefore questionable whether a rate cut by the ECB can help the stock markets because the ECB has less leeway than the Fed with its zero interest rate for bank lending.
The bond markets, on the other hand, benefited from the interest rate cut and the flight of investors to secure investments. Prices rose accordingly and in return, yields fell. The yield on the ten-year US government bond hit a historic low of less than 0.7 percent on Friday. The yield on the ten-year federal bond also just barely hit a new record low of minus 0.745 percent.
Investors focus on the outlook of companies on the stock market. Many corporations have already tuned investors to lower sales and profits due to falling demand and disruption to global supply chains.
Does Adidas lower the outlook?
Continental recently shocked investors with a warning to the entire automotive industry: According to Conti boss Elmar Degenhart, the Chinese car market will collapse by 30 percent in the first quarter. This is particularly dramatic for German car manufacturers, where the Chinese business is between 22 percent (Daimler) and 37 percent (Volkswagen).
The sporting goods manufacturer Adidas generates more than a fifth of its sales in China. The group will present its annual figures on Wednesday. The Chinese authorities closed a significant proportion of Adidas stores in early February, puma and Nike in the People’s Republic. Adidas stock has lost 16 percent in the past two weeks.
The stock from RWE held. The supplier also presents its balance sheet for the past year on Wednesday. In the current environment, investors consider utilities to be comparatively safe investments on the stock market.
Investors will also examine the upcoming economic data, especially with a view to coronavirus symptoms. The data calendar includes figures on German industrial production on Monday and European industrial production on Thursday.
In the United States, economists believe Wednesday’s consumer prices should go down and should not be in the way of further Fed rate cuts. The reason for this would be the falling oil price. It is doubtful whether good economic data can pull the markets out of their corona panic. On Friday, the better-than-expected data from the US job market for February fizzled on the stock exchange.
More: Even after the recent crash, the Dax is still overvalued. This also applies to the US stock exchanges.
Erich Kästner is a famous writer, everyone knows his cheerful books like “Das doppelte Lottchen” or “Emil und die Detective”. But the author also had a dark side, which comes to light in poems like “The Ballad of the Imitation Drive” in 1931 – children hang up with playmate Fritz there, as they saw in the newspaper when executing criminals. “If someone is not afraid, he has no imagination,” said Kästner once.
The worst things start innocently, according to his message. Unfortunately, this also applies to the stock exchanges these days. There is trading with fear that struggles greedily for the favor of money every trading day. And for many years, confidence had the upper hand. Since the financial crisis in 2009, prices have had almost one direction: upwards.
But the happy times seem to be over, the flying classroom is in a nosedive. The S&P 500, Nikkei and Dax literally together. Companies around the world lost a total of $ 4 trillion in stock market value. With the money lost in the past week alone, all 30 DAX companies could be bought three times.
A shadow lays over the financial markets, fear arrives. The trigger is the corona virus, a new type of virus that attacks the airways and spreads at a frantic pace. The epidemic in China becomes a pandemic, the course of which can be traced on the world stock exchanges: Japan, South Korea, Italy – and now Germany.
It is only a matter of time before infections and deaths soar in other countries and continents like America. The Sars-CoV-2 virus spreads far too effectively for this to be able to stop it. For many days and even weeks there are no symptoms to be seen in the sufferer who ignorantly transfers the virus to others.
But as dangerous as it may be, the disease in itself may not trigger a stock market crash. Above all, fear and precautionary measures paralyze the economy: employees stay at home, trains don’t run, trade fairs are canceled.
There is a fundamental question for investors: are we witnessing a correction that will bring new momentum to new heights? Or are we currently experiencing a crash, the start of a bear market? For some observers, this may not be so unlikely: “A downward spiral is impending,” says Robert Shiller, Nobel Laureate in Economics, in an interview with the Handelsblatt.
However the courses go, panic is not a good guide. However, it is not naivety either. For example, US President Donald Trump recommended the entry into stocks via Twitter, his economic advisor Larry Kudlow agreed that investors should “seriously take advantage of the slump to get started”. The advice from the White House is understandable in an election year, but only recommendable to a limited extent. Further slumps could follow, valuations are still high.
Investors should react prudently and appropriately to their circumstances. Under no circumstances should investors cancel their share savings plans or liquidate their securities accounts. The world will not go under, the slump should be used to get started – but carefully. The right behavior for every investor depends heavily on the goals and the positioning of the portfolio. And from the personality (see the instructions for different investor types).
There is a real opportunity for long-term oriented investors who have cash at their disposal. According to Anik Sen, global equity chief at New York’s Pine Bridge investment firm, the price dip is “incredibly healthy” after the high gains in the past. “Anything going up in a straight line is very susceptible to exogenous shock.”
There is an emergency
Stocks have long been overvalued. The economy has been weakening since 2018, and more and more companies are warning of lower earnings. Still, stock prices rose to record highs. Even in 2020, when the corona virus from China infected more and more people and ever larger parts of global trade.
How could that be? There is an emergency in the world. The interest on bonds is low, some savers even have to pay penalty interest if they have their money on the high edge. The investment pressure was high, drove more and more investors into stocks and justified ever higher prices.
The result was an unreal stock exchange world in which the prices only climbed upwards. The German Dax lagged behind the major stock exchanges for a long time, but was finally infected by the global share euphoria and still reached an all-time high on February 19 with 13,789 points.
Then the swing came. America’s technology giant Apple announced record numbers in January, which gave investors a new high. But a few days ago, the iPhone manufacturer cashed in its sales forecast again.
CEO Tim Cook and his chief financial officer Luca Maestri no longer presented any new forecast. The cause is the corona virus and the resulting “unforeseeable consequences of possible delivery bottlenecks” for Apple for components of his iPhone.
Unpredictable consequences? Investors hate nothing more than uncertainty. At the same time, images from northern Italy flickered on television screens last weekend, where the authorities quarantined some regions in the face of the Corona outbreak. Austria stopped train traffic with Italy. Wherever the investor looked: negative headlines. No wonder that the epidemic has also hit the stock exchanges since Monday. The courses collapsed worldwide.
Anything going up in a straight line is very susceptible to exogenous shock. Anik Sen (Pine Bridge equity chief)
The decline cannot be justified with emotions. The epidemic has tangible economic consequences. In the “Baseline Scenario”, economists at Oxford Economics already assumed that the seasonally adjusted global economy would shrink in the first quarter of 2020 – for the first time since the onset of the financial crisis.
Overall, the institute expects the global economy to grow by 2.3 percent in 2020. That would also be the weakest value since 2009.
However, it is already clear that the “baseline scenario” will not occur. It gets worse. Because according to the scenario, the virus could have spread massively, but should have been limited to China. A global pandemic has started to spread to Europe, which according to virologists could end in April or May at the earliest.
According to Oxford Economics, this would plunge the euro zone and the United States into recession in the first half of 2020, but according to the economic research institute, this would be followed by a rapid economic recovery in the second half of the year.