Adidas is facing a double whammy of shipping delays and rising costs, impacting deliveries to retailers and potentially affecting profits.

Bjorn Guiden, CEO, revealed that shipments are currently delayed by three weeks due to security concerns in the Red Sea, leading to delivery issues, particularly in Europe. This delay is causing frustration, as some popular products are experiencing high demand that Adidas cannot currently meet.

Furthermore, shipping companies are avoiding the Suez Canal due to security threats, forcing them to reroute around Africa, which significantly increases travel time and costs. This translates to higher freight rates for Adidas, further squeezing their profit margins.

Despite these challenges, Adidas is confident of managing the impact on margins, says Guiden. The company has already factored the disruption into its 2024 profit forecast released recently.

This situation highlights the ongoing challenges faced by global supply chains, particularly in sensitive regions like the Red Sea. While Adidas expects to weather this storm, it serves as a reminder of the potential for disruptions and the need for flexible and adaptable business strategies.