Nike closes all stores in US, Canada, Western Europe, Australia, and New Zealand due to coronavirus

Sportswear giant Nike Inc said on Sunday it is closing all of its stores in the United States and several other countries to limit the spread of the coronavirus.

Nike stores in Canada, Western Europe, Australia and New Zealand will be closed from March 16 to 27, the company said in a statement.

However, Nike-owned stores in South Korea, Japan, most of China and in many other countries are currently open and will continue their normal operations.

‘We are taking additional steps in other Nike-managed facilities, including the option to work from home,’ it added.

Earlier this month Nike had temporarily closed its European headquarters in Netherlands after an employee was infected with the coronavirus.

A tourist wears a protective mask as she carries her suitcases past a closed Nike store at Las Ramblas in Barcelona on Sunday

Apparel retailer Urban Outfitters Inc, which owns brands including Anthropologie and Free People, said on Saturday it was closing all its consumer stores worldwide until at least March 28.

However, retailers including Macy’s Inc, Saks Fifth Avenue and Gap Inc’s Banana Republic sent notices to shoppers last week saying they were open for business in a move to stem losses due to a steep drop in store traffic.

Nike isn’t the only sporting goods brand that is feeling the pinch from coronavirus.

Adidas CEO Kasper Rorsted said the outbreak of the pathogen and the fallout has dealt his company ‘a painful setback.’

Rorsted says that foot traffic to his company’s stores has dropped dramaticaly as a result of quarantine measures and lockdowns in Asia, Europe, and the United States.

‘In the sporting goods industry, you are really at the end of the food chain,’ Rorsted told CNBC. 

During an emergency, consumers will be more focused on existential needs like food, medicine, and urgent supplies, rather than sneakers or yoga pants.

‘That is what we are seeing so far in the first quarter,’ Rorsted said. has reached out to Adidas to inquire about the company’s plans for its stores in light of the global pandemic. 

Adidas said its sales would fall by $1billion in greater China, hitting operating profit by up to $540million.

Further falls in demand in South Korea and Japan will contribute to a 10 per cent drop in first-quarter sales, compared with last year.

Puma has also warned on profits, adding it did not expect business to return to normal soon. 

‘The virus hit looks worse than feared,’ Jefferies analyst James Grzinic wrote in a note on Adidas, whose clients include Danish tennis star Caroline Wozniacki.

Shares in Adidas and Puma, pummeled in the past few weeks, fell 8 per cent and 4.5 per cent respectively.

Puma said: ‘We unfortunately conclude that a short-term normalization will not occur.’  

Sporting events around the world have been cancelled, postponed or played without spectators, with the virus’s spread raising questions about the viability of the upcoming Olympic Games in Japan and Euro 2020 soccer championship.

While the Olympics is not usually a major driver of sales for the sporting goods industry, Euro 2020 is more important for sales of replica jerseys and balls.

If both events are postponed, Adidas could lose up to 70 million euros of sales, Rorsted told journalists, but added he was upbeat about the underlying health of the business and was not planning any job cuts.

Adidas, which last month warned its business in the greater China area had dropped by about 85 per cent year-on-year in the period since China’s Lunar New Year on January 25, said about half of its 12,000 stores in China were open again.

But both companies noted a deterioration in markets such as Japan and South Korea, where Chinese tourists often travel to shop, and in Europe.

Adidas Finance chief Harm Ohlmeyer said he expects a return to normal in the second half of the year, adding that the company had not yet cut orders to factories.

Adidas and Puma said most of their factories in China were operating again. 

Puma said its outbound logistics from China were also mostly in operation, so its global supply chain was only seeing some minor delays.

Excluding the impact from the virus, Adidas forecast currency-neutral sales to increase by between 6 per cent and 8 per cent for the full year and for its operating margin to rise by between 10.5 per cent and 11.8 per cent.

Fourth-quarter sales – covering a period before the coronavirus took hold – rose a currency-adjusted 10 per cent to $6.5billion, while operating profit came in at $273million, missing analysts’ mean forecasts.

Currency-neutral sales grew 18 per cent in greater China, 10 per cent in North America and 14 per cent in Europe, the latter a big rebound from declines in the first half of 2019 after the firm took steps to reduce its reliance on its Originals fashion line.