Reuters reported that German sporting goods maker Adidas unexpectedly said on Monday, August 22, that its Chief Executive, Kasper Rorsted, would resign next year amid reports that the company has recently struggled in its crucial China market.
In a statement, Thomas Rabe, Adidas Supervisory Board Chairman, said, “After three challenging years that were marked by the economic consequences of the COVID-19-pandemic and geo-political tensions, it is now the right time to initiate a CEO transition and pave the way for a restart.”
The group added that Rorsted and its supervisory board had mutually decided that the CEO would transfer his position in 2023. He will be in the office until Adidas recommends a successor.
Rorsted, who has been in the leader’s position of Adidas since 2016, said that it had had to make “huge efforts” to overcome the difficulties in the last few years.
He said, “This is why enabling a restart in 2023 is the right thing to do—both for the company and me personally.” But he did not give out reasons why he was leaving. Adidas had, in 2020, run on his contract until July 31, 2026.
As a result, Adidas’ stock fell 3% in Frankfurt the day following the announcement. And Adidas’ shares have already dropped 37% this year.
During his tenure, Rorsted led Adidas to push forward with its digital transformation and grew online sales more than fivefold. But revenue growth was lower than that of peers such as Nike Inc. and Puma SE in recent years.
In particular, a Chinese consumer boycott that began last year hit Adidas’ sales. The boycott came after Adidas joined other Western brands to raise concerns about forced-labor accusations in China’s Xinjiang region.
Adidas last month lowered its 2022 income target. Adidas said that a slower-than-planned recovery in China is due to pandemic restrictions.
According to Jiemian News, Adidas is currently shrinking its stores in China’s second and third-tier cities.