Chinese Suppliers Seek Compensation from Adidas

Chinese suppliers may seek assistance from the courts if adidas does not compensate them for terminating contracts.

Last week adidas announced its plan to shut down an apparel operation in Suzhou, Jiangsu province and terminate its contracts with five suppliers in the country.

Shanghai Manlang Textile Co. Ltd. General Manager, Sun Yingli said adidas informed her and her colleagues in April that it wished to end the contract with the textile company.

Sun said: “Some machines and software systems are tailor-made for adidas. They will be useless if we stop working with that company. What’s worse, I’ll have to lay off workers. Other companies may even go bankrupt. I hope we can sit down and negotiate a resolution as early as possible.”

Adidas Greater China Corporate Communication Director, Sabrina Cheung said adidas “gave its suppliers fair legal notice of its intent to terminate the business contracts.”

About 30 percent of what Shanghai Manlang Textile produces is made for adidas. Other suppliers reportedly have no clients other than adidas.{jcomments on}