By LAURIE BURKITT
BEIJING?Adidas AG is closing its only company-owned apparel factory in China as part of a move to improve efficiency.
An Adidas spokeswoman said the German sporting-goods company will close the 160-worker factory in China's coastal city of Suzhou at the end of October. The company said it will source its products from other local Chinese manufacturers. It already works with 300 supplier factories in the country.
Bloomberg NewsPedestrians walk past an Adidas store in Beijing, China.
The closure is part of Adidas' efforts to restructure business in China and globally to ensure efficiency and leverage scale, the spokeswoman said, adding that the company will not be reopening the factory elsewhere.
Athletic companies like Adidas were among the first apparel makers to offer Western-branded clothing to Chinese consumers. But the market is increasingly competitive as companies such as Gap Inc. and Swedish brand H&M Hennes & Mauritz AB open outlets across the country.
Now sportswear makers are facing a slump in China. In June, Nike Inc., which dominates the Chinese market, announced that sales in its fiscal third quarter fell 3.9% to $694 million in China's mainland, Hong Kong and Taiwan from the same period a year earlier. Chinese homegrown brand Peak Sport Products Co. also issued a profit warning for the first half and full year of 2012, citing industry-wide inventory correction and weak economic conditions that have hurt demand.
Beijing-based Li Ning Co. saw profits fall 65% last year and recently announced it would be replacing its veteran chief executive.
Write to Laurie Burkitt at laurie.burkitt@wsj.com
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