Adidas continues core business despite challenges from 'fast fashion' brands

Adidas Group China, a unit of German sporting goods giant Adidas AG, said on Tuesday it is continuing its core business despite intensive competition from "fast fashion" brands.

"We will stick to our roots in athletic performance in the future, which accounts for around 80 percent of our sales," said Sabrina Cheung, corporate communication director for Adidas Greater China.

Cheung said their NEO and Original lines may have some competition with street fashion brands, such as Diesel, or fast fashion brands, including Spanish Zara, but Adidas will maintain their sports performance roots.

Industry experts said sporting goods giants, including US Nike Inc, are facing challenges in China as the country's consumers become more interested in leisure and pure fashion apparel.

However, global fast-fashion brands, such as Zara, owned by Spanish company Inditex SA, and the Swedish H&M, are expanding rapidly across the country.

Cheung said in addition to the fast growth of Original and Neo lines, due to their small base, running and training segments are the growth engine for the group.

In China, brands such as Nike, Adidas, Kappa, Puma and Fila occupy the high-end space, while the medium-level space is dominated by domestic companies such as Li Ning and Anta.

In the below 200-yuan ($32) market, the leading players are Xtep, Peak, 361and ERKE, according to Research and Markets.

In May, the German sportswear giant released their first quarter financial results. Global revenue decreased 2 percent year-on-year to 3.75 billion euros ($4.9 billion) in the first quarter of 2013. The gross margin of Adidas increased 2.4 percent year-on-year to 50.1 percent in the first quarter.