As many retailers and brands worldwide have been turning to banks and Governments for loans and aids, German sportswear giant adidas too earlier this month agreed to take a state-backed loan.
The company now realises that it does not require the loan and is planning to replace it using a multi-billion euro bond to get through the crisis caused by the pandemic.
After the announcement of the postponement of the Euro cup and the Olympics along with the closure of stores in multiple countries throughout the world, the retailer has taken quite a hit and therefore agreed to borrow €2.4 billion in a Government-backed loan.
However, experts did not agree with this move as adidas had been recording excellent sales figures and profits before the onset of the crisis.
The company has withdrawn its outlook for the full year after warning in March that they expect sales to decline by around €1 billion in China. adidas has continued online operations and suspended dividend payments as part of a condition for the state-backed loan.
In addition to the €2.4 billion from the KfW state development bank, the company had borrowed 600 million in loan commitments from a consortium of banks including Bank of America, Mizuho Bank, Standard Chartered Bank and Deutsche Bank among others.