Adidas to close its only factory in China

BEIJING, July 18 Wed Jul 18, 2012 7:54pm IST

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BEIJING, July 18 (Reuters) - Sporting goods and apparel maker Adidas AG is closing its only company-owned sportswear factory in China later this year to streamline manufacturing, a company spokeswoman said on Wednesday.

Spokeswoman Sabrina Cheung said in an email China remained a key market for sourcing goods for Germany-based Adidas with more than 300 supplier partners in the country.

The Suzhou Adidas factory employs about 160 workers who were notified of the closure a few months ago and who will receive a benefits package, Cheung said.

The sports apparel industry is becoming increasingly competitive amid China's slowing economy, with Adidas, Nike Inc and Converse competing against up-and-coming Chinese players such as Li Ning Co Ltd, ANTA Sports Products Ltd, 361 Degrees International and China Dongxiang (Group) Co Ltd.

The tougher economic environment is hurting sales as well as manufacturing in the sector.

Earlier this month Li Ning, founded by China's most famous Olympic gymnast and which recently warned of a "substantial decline" in 2012 profit, replaced its chief executive and said it would tackle bloated inventory and scale back new store openings.

Adidas is the official sponsor of the German and other national teams that will compete in the London Olympics which begin later this month.

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