US Business

Adidas on Tuesday named Bjorn Gulden, chief of rival outfitter Puma, as its new CEO as the German sportswear giant seeks to emerge from months of turbulence.

The Norwegian former professional football and handball player will take on the role from January next year, replacing current CEO Kasper Rorsted. 

He faces big challenges at Adidas, which has seen sales hit by coronavirus restrictions in key market China, and recently ended a profitable partnership with rapper Kanye West over his anti-Semitic outbursts.

“As CEO of Puma, he re-invigorated the brand and led the company to record results… Gulden will head Adidas into a new era of strength,” said Thomas Rabe, chairman of Adidas’s supervisory board. 

He “brings almost 30 years of experience in the sporting goods and footwear industry,” Rabe added. 

The 57-year-old is being given a five-year contract, an Adidas spokesman said.

Puma meanwhile announced that Arne Freundt, currently the company’s chief commercial officer, would take over as CEO with immediate effect. 

The sportswear groups, both based in the small town Herzogenaurach, Bavaria, were founded decades ago by two brothers, Adolf and Rudolf Dassler, who had a fierce rivalry.

Gulden, 57, had already spent seven years at Adidas in the 1990s. He has also held senior roles at companies including shoe retailer Deichmann and clothing and sports equipment company Helly Hansen.

He used to play football for FC Nuremberg in Germany, and Bryne and Stromsgodset in Norway.

– Tough task ahead –

In July, Adidas lowered its outlook for 2022 due in part to continuing curbs in China, which is pursuing a Covid-zero strategy of continued lockdowns.

The group said it sees net profit for the year coming in at 1.3 billion euros ($1.3 billion) compared to an earlier forecast of between 1.8 and 1.9 billion euros. 

The move to cut ties with rapper West — now known formally as Ye — in October came after he triggered an outcry with posts that Adidas labelled “unacceptable, hateful and dangerous”.

Adidas ended production of the highly successful “Yeezy” line designed together with West, a move that would slash the company’s net income in 2022 by “up to 250 million euros”.

West also triggered controversy when he appeared at a Paris fashion show wearing a shirt emblazoned with “White Lives Matter”, a slogan created as a part of a backlash to the Black Lives Matter movement.

Gulden’s “success at reinvigorating Puma will be relevant for Adidas and we expect him to hit the ground fast”, Deutsche Bank analysts said.

While noting the task ahead was “not easy… the Adidas brand is large and has a substantial back catalogue of designs and franchises. 

“We think with a positive energy injection from senior management a resurgence in the brand over the next three years is feasible.”

Adidas on Tuesday named Bjorn Gulden, chief of rival outfitter Puma, as its new CEO as the German sportswear giant seeks to emerge from months of turbulence.

Gulden, a Norwegian former professional football and handball player, will take on the role from January next year, replacing current CEO Kasper Rorsted, Adidas said. 

The 57-year-old “brings almost 30 years of experience in the sporting goods and footwear industry,” said Thomas Rabe, chairman of the supervisory board of Adidas. 

“As CEO of Puma, he re-invigorated the brand and led the company to record results… Gulden will head Adidas into a new era of strength”.

Adidas has faced months of turmoil which have hit sales. The company lowered its outlook for 2022 in July due in part to continuing severe coronavirus restrictions in key market China.

The group also cut ties with Kanye West at the end of October after a series of anti-Semitic tweets by the rapper caused an outcry.

Adidas ended production of the highly successful “Yeezy” line designed together with West, a move that would slash the company’s net income in 2022 by “up to 250 million euros ($246 million)”.

Both Adidas and Puma are based in the Bavarian town of Herzogenaurach, close to Nuremberg.

The twin companies were founded by two brothers. Adolf Dassler began Adidas before his brother, Rudolf, with whom he had a fierce rivalry, established Puma.

A deal between the EU and the UK on post-Brexit trading arrangements in Northern Ireland is possible before the end of the year, Ireland’s foreign minister said on Tuesday.

Simon Coveney’s optimism comes as the governments in Dublin and London prepare for talks at a British-Irish summit later this week.

Europe’s pointman on talks to resolve the row, Maros Sefcovic, on Monday said agreement could come within weeks with the right “political will”.

Ireland’s prime minister Micheal Martin will meet his UK counterpart Rishi Sunak at the summit in Blackpool, northwest England, on Thursday, Coveney added.

“We need to get this issue behind us in terms of the protocol in a way that respects an international treaty that’s been signed,” he said.

“I think it’s doable by the end of the year,” he told reporters in Dublin, stopping short of a definitive timeline for talks.

Relations between EU member Ireland and the UK, which left the bloc in 2021, have been damaged by disagreements over the implementation of trade arrangements in UK-run Northern Ireland. 

The deal signed by London and Brussels effectively keeps Northern Ireland within the European single market and customs union.

Northern Ireland has the UK’s only land border with the EU but it needs to be kept open under the terms of a 1998 peace deal that ended decades of violence over British rule.

It has led to checks on goods heading to the province from Great Britain — England, Scotland and Wales — which the UK and pro-UK parties in Northern Ireland oppose.

The UK wants to unilaterally overhaul the protocol through legislation currently making its way though parliament despite EU warnings it could spark reprisals and a possible trade war.

Coveney said this week’s summit would also give the UK the opportunity to provide “some clarity” on its approach to elections in Northern Ireland.

Last week, London backtracked on calling a December election to the region’s devolved assembly, which has been paralysed since February over unionist opposition to the Northern Ireland protocol.

The Democratic Unionist Party (DUP), the largest pro-UK party in the province, wants the arrangements overhauled or scrapped entirely, saying they threaten Northern Ireland’s constitutional place in the UK.

Coveney called for compromise on all sides, including in the DUP and said talks were the way forward.

In London, Sunak and his senior ministers agreed that restoring the Belfast assembly and protecting the Good Friday Agreement was their “absolute priority”.

Northern Ireland Secretary Chris Heaton-Harris told his colleagues he had carried out “extensive engagement” in the region in recent days, Sunak’s office said in a statement.

He was expected to outline his “informed approach” based on those discussions to parliament on Wednesday, it added.

South Africa’s president, whose coal-dependent country is among the world’s biggest polluters, Tuesday criticised international funders for making it difficult for poorer nations to access aid to fight climate change.

Support from multilateral organisations “is out of reach of the majority of the world’s population due to lending policies that are risk-averse and carry onerous costs as well as conditionalities,” Cyril Ramaphosa told the UN COP27 climate summit.

Addressing the meeting in Egypt’s Sharm el-Sheikh, he said “funding institutions need to transform … the way in which they fund projects that will enable us to develop with regard to climate change”.

According to a UN-backed report released Tuesday, developing countries and emerging economies need investments well beyond $2 trillion annually by 2030 if the world is to stop the global warming juggernaut.

South Africa, one of the world’s top 12 polluters, last week revealed that it will require about $98 billion over the next five years to transition to net zero.

Last year, at the COP26 in Glasgow, Pretoria secured $8.5 billion in loans and grants from a group of rich countries towards its green transition.

“We need a clear roadmap to deliver on the Glasgow decision to double adaptation financing by 2025” Ramaphosa said in his address.

He called on rich nations to honour their commitments “because failing to honour these commitments breaks trust and confidence in the process”.

The head of state also assured the summit that South Africa, which generates about 80 percent of its electricity through coal, was on course to retire several of its ageing coal-fired power plants in the next eight years.

The World Bank last week granted South Africa $497 million to decommission one of its largest coal-fired power plants and promote renewable energy.

South Africa will require at least $500 billion dollars to achieve carbon neutrality by 2050, according to the bank.

burs-zam/sn/fz

French automaker Renault unveiled a sweeping overhaul on Tuesday in a bid to attract investors as it expands its electric vehicle business amid an accelerating market.

Under the green revamp, Renault is to split its operations in two, with a new electric vehicle unit and a subsidiary for petrol, diesel and hybrid cars that will pair up with China’s Geely. 

The carmaker’s flagship division following the reorganisation will be Ampere, which aims to produce a million electric vehicles by 2031, the group said ahead of an investor day in Paris.

The new division will employ around 10,000 staff in France.

Renault is the latest automaker seeking to finance a shift towards electric.

The market for the greener vehicles is expected to grow rapidly in response to consumers’ worries about climate change, putting pressure on manufacturers to develop less polluting products.

The European Union last month agreed to phase out new CO2-emitting vehicles by 2035, a move set to turbo-charge the production of electric prototypes on the continent.

Renault follows the likes of US automaker Ford and Germany’s Volkswagen.

The latter launched its premium sports brand Porsche on the stock market in September to finance its investment in electric, connected and autonomous cars.

Ampere will produce the new Renault 5 and Renault 4 among other models in northern France and will target more than 30-percent growth annually over the next eight years and to break even by 2025.

Renault said it would list Ampere on the Euronext Paris stock exchange in the latter half of 2023 and invite investment but will retain “a strong majority”.

The group — in which the French state and carmaker Nissan each own 15 percent — has still to outline the part that its Japanese partner will play in the new electric division.

– Financing electric drive – 

For hybrid and internal-combustion vehicles, Renault plans to combine its technological, manufacturing and research and development activities with Chinese automaker Geely.

The 50-50 partnership with the Chinese group — owner of Volvo — will develop and produce engines, gear boxes and other components for hybrid and petrol and diesel vehicles.

It will employ 19,000 people across Europe, China and South America, and have 17 factories and five research and development centres.

Turnover for the division is expected to grow by four percent by 2027, the group said.

“We are designing an agile and innovative organisation to manage the volatility and accelerated technological evolution of our time,” said Renault chief executive Luca de Meo.

The group aims to see an operating margin — a key profitability yardstick — of above eight percent in 2025.

Shares in Renault fell on the Paris exchange shortly after trading began on Tuesday, before regaining ground by mid-morning. 

The group’s financial targets are “more ambitious than expected” but “raise questions”, analyst Tom Narayan of RBC said.

The company suffered a historic loss in 2020 due to the Covid-19 pandemic and its recovery was destabilised by its withdrawal from Russia following Moscow’s invasion of Ukraine.

In late July, Renault said that its decision to quit the Russian market had pushed it deep into the red in the first half of 2022.

Two months earlier, it had sold its 100-percent stake in Renault Russia and its 68-percent stake in AVTOVAZ. 

But with its new revamp, Renault said it planned to resume paying shareholders a dividend next year for the first time since 2019. 

The value of traditional car manufacturers pales in comparison to new players on the market specialising in electric vehicles such as Elon Musk’s Tesla or Chinese firm BYD.

US giant Ford has taken similar steps, announcing the creation of the “Model E” electric subsidiary earlier this year.

Renault’s sales of traditional internal-combustion vehicles are falling. 

In the first nine months of 2022, hybrid and electric vehicles represented 38 percent of the brand’s registrations in Europe, a year-on-year increase of 12 percent.

The separation of Renault’s electric and conventional production has concerned trade unions after several waves of job cuts.

Asian and European stock markets traded mixed Tuesday in jittery deals as Americans head to the polls in critical midterm elections.

The dollar clawed back some of its recent losses versus the euro, while oil continued to be weighed down by weaker Chinese demand expectations.

Frankfurt stocks gained ground after overnight Wall Street gains, but Paris flatlined and London slid in value.

“Those US midterm elections today might keep investors on the sidelines a bit before they make any major decisions,” noted Markets.com analyst Neil Wilson.

Hong Kong and Shanghai sank as speculation about a rollback of China’s strict zero-Covid policies fuelled market volatility, even after Beijing vowed to stick with its harsh lockdowns and testing regimes.

On the upside, Tokyo stocks won 1.3 percent.

Polls opened Tuesday in crucial US elections that could decide the political future of both President Joe Biden and his predecessor Donald Trump — who has all but announced he will seek the White House again in 2024.

Biden’s Democrats are facing a gargantuan struggle to hang on to Congress, after a race the president has cast as a “defining” moment for US democracy — while Trump’s Republicans have campaigned hard on kitchen-table issues like inflation and crime.

Polls show Republicans are likely to win at least one house of Congress — and some see the prospect of further Washington gridlock as a scenario that lessens the risk of policy uncertainty.

“Consensus is that investors prefer political deadlock as it prevents any significant shifts in policy,” added Scope Markets analyst James Hughes.

“With that looking like a real possibility, the real market turbulence may appear later in the week.”

– US on inflation watch –

On Monday, US stocks climbed, with the Dow Jones Industrial Average finishing up 1.3 percent and the broad-based S&P 500 rising 1.0 percent.

The next major data point that investors are watching is US inflation data due on Thursday.

SPI Asset Management analyst Stephen Innes said the data “will be the next marker for the (Federal Reserve) on how high to take interest rates”.

Back in Asia, Hong Kong closed down 0.2 percent after jumping nearly three percent in the previous session as investors continued to hope for a relaxation of China’s strict Covid-19 rules.

“Speculation about reopening continues to add some market volatility,” said Taylor Nugent, an economist at National Australia Bank.

“In a timely reminder of the potential for Covid policy to hit output, Apple warned iPhone shipments will be lower than previously expected after China lockdowns affected operations at a supplier’s factory,” he noted.

– Key figures around 1130 GMT –

London – FTSE 100: DOWN 0.1 percent at 7,293.16 points

Paris – CAC 40: FLAT at 6,416.83

Frankfurt – DAX: UP 0.4 percent at 13,581.88

EURO STOXX 50: UP 0.3 percent at 3,722.09

Tokyo – Nikkei 225: UP 1.3 percent at 27,872.11 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 16,557.31 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,064.49 (close)

New York – Dow: UP 1.3 percent at 32,827.00 (close)

Pound/dollar: DOWN at $1.1468 from $1.1514 on Monday

Euro/dollar: DOWN at $1.0005 from $1.0020

Dollar/yen: DOWN at 146.26 from 146.93 yen

Euro/pound: UP at 87.23 pence from 87.03 pence

West Texas Intermediate: DOWN 1.2 percent at $90.70 per barrel

Brent North Sea crude: DOWN 0.7 percent at $97.25 per barrel

The United Arab Emirates and Egypt agreed Tuesday to develop one of the world’s largest wind farms in a deal struck on the sidelines of the UN’s COP27 climate summit in Sharm el-Sheikh. 

The 10-gigawatt (GW) onshore wind project in Egypt will produce 47,790 GWh of clean energy annually once it is completed, the UAE’s state news agency WAM said in a statement, without specifying an exact timeframe. 

It will offset 23.8 million tonnes of carbon dioxide emissions – equivalent to around nine percent of Egypt’s current CO2 output, according to WAM.

The wind farm will also save Egypt an estimated $5 billion in annual natural gas costs and help create as many as 100,000 jobs, it said. 

Emirati President Sheikh Mohamed bin Zayed Al-Nahyan joined his Egyptian counterpart Abdel Fattah al-Sisi at the signing of the agreement between the UAE’s Masdar renewable energy firm and Egypt’s Infinity Power and Hassan Allam Utilities.

In a statement on Twitter, Sheikh Mohamed said the deal was “consistent with our commitment to advance renewable energy solutions that support sustainable development”.

The UN’s COP27 climate summit kicked off Sunday in Egypt with warnings against backsliding on efforts to cut emissions and calls for rich nations to compensate poor countries after a year of extreme weather disasters.  

“We will endeavour to take forward the gains made here at COP27, as the UAE prepares to host COP28 next year,” WAM quoted Emirati industry minister Sultan Ahmed Al Jaber as saying. 

COP28 will be held in the UAE from November 6-17, 2023. 

French automaker Renault unveiled a sweeping green revamp Tuesday, splitting its operations in two: a new electric vehicle unit and a subsidiary for petrol, diesel and hybrid cars that will pair up with China’s Geely. 

The car maker’s flagship division following the reorganisation will be Ampere, which will aim to produce a million electric vehicles by 2031, the group said ahead of an investor day in Paris.

The new division will employ around 10,000 staff in France.

The overhaul comes amid expectations the electric vehicle market will grow rapidly in response to consumers’ worries about climate change, putting pressure on manufacturers to develop less polluting products.

The European Union last month agreed to phase out new CO2-emitting vehicles by 2035, a move set to turbo-charge the production of electric prototypes on the continent.

Ampere will produce the new Renault 5 and Renault 4 among other models in northern France and will target more than 30-percent growth annually over the next eight years.

Renault said it would list Ampere on the Euronext Paris stock exchange in the latter half of 2023 and invite investment but will retain “a strong majority”.

Renault — in which the French state and car maker Nissan each own 15 percent — has still to outline the part that its Japanese partner will play in the new electric division.

– Financing electric drive – 

For hybrid and internal-combustion vehicles, Renault plans to combine its technological, manufacturing and research and development activities with Chinese automaker Geely.

The 50-50 partnership with the Chinese group — owner of Volvo — will develop and produce engines, gear boxes and other components for hybrid and petrol and diesel vehicles.

It will employ 19,000 people across Europe, China and South America, and have 17 factories and five research and development centres.

“We are designing an agile and innovative organisation to manage the volatility and accelerated technological evolution of our time,” said Renault chief executive Luca de Meo.

Investors on Monday expressed their interest in Renault’s transformation, with the group’s shares climbing 3.77 percent on the Paris stock market.

The company suffered a historic loss in 2020 due to the Covid-19 pandemic and its recovery was destabilised by its withdrawal from Russia following Moscow’s invasion of Ukraine.

In late July, Renault said that its decision to quit the Russian market had pushed it deep into the red in the first half of 2022.

Two months earlier, it had sold its 100-percent stake in Renault Russia and its 68-percent stake in AVTOVAZ. 

But with its new revamp, Renault said it planned to resume paying shareholders a dividend next year for the first time since 2019. 

The value of traditional car manufacturers pales in comparison to new players on the market specialising in electric vehicles such as Elon Musk’s Tesla or Chinese firm BYD.

US giant Ford has taken similar steps, announcing the creation of the “Ford Model E” electric subsidiary earlier this year.

And German auto group Volkswagen launched its premium sports brand Porsche on the stock market to finance its investment in electric, connected and autonomous cars.

Renault’s sales of traditional internal-combustion vehicles are falling. 

In the first nine months of 2022, hybrid and electric vehicles represented 38 percent of the brand’s registrations in Europe, a year-on-year increase of 12 percent.

The planned separation of Renault’s electric and conventional production has concerned trade unions after several waves of job cuts.

Asian markets were mixed on Tuesday following an upbeat session on Wall Street as investors look to crucial midterm elections that polls show could upend power in Washington.

Shares ended lower in Hong Kong and Shanghai as speculation about a rollback of China’s strict zero-Covid policies fuelled market volatility, even after the government vowed to stick with its harsh lockdowns and testing regimes.

But Tokyo stocks closed 1.3 percent higher, extending rallies in New York, where the dollar also retreated against the pound and the euro.

Early voting has begun in many states and most US voters go to the polls on Tuesday, with a Republican takeover of Congress likely dooming President Joe Biden’s ambitious proposals.

Polls show Republicans are likely to win at least one house of Congress — and some see the prospect of further Washington gridlock as a scenario that lessens the risk of policy uncertainty.

“This may very well be taken as a positive for equity markets over coming days,” Clifford Bennett, chief economist at ACY Securities, said in a note.

“The Biden administration, while welcomed to office by financial markets, has nonetheless delivered on being a very big spending government,” Bennett wrote.

“It is difficult to argue the extreme inflation and slowing economy are entirely the Biden administration’s fault, but voters will be very clear in their feelings on the matter just the same.”

– Not too bullish –

On Monday, US stocks climbed, with the Dow Jones Industrial Average finishing up 1.3 percent and the broad-based S&P 500 rising 1.0 percent.

The next major data point that investors are watching is US inflation data due on Thursday, “which will be the next marker for the (Federal Reserve) on how high to take interest rates”, said Stephen Innes of SPI Asset Management.

Before the US Consumer Price Index data is released, “traders are unlikely to live bullish life to the fullest”, he predicted.

Seoul gained 1.1 percent, Taipei rose 0.9 percent and Sydney was up 0.4 percent, with Singapore rising 0.3 percent.

But Hong Kong closed down 0.2 percent after jumping nearly three percent in the previous session as investors continued to hope for a relaxation of China’s strict Covid-19 rules.

“Speculation about reopening continues to add some market volatility,” said Taylor Nugent, an economist at National Australia Bank.

“In a timely reminder of the potential for Covid policy to hit output, Apple warned iPhone shipments will be lower than previously expected after China lockdowns affected operations at a supplier’s factory,” he noted.

Shanghai closed down 0.4 percent, while Jakarta fell 0.7 percent and Wellington dropped 1.2 percent.

European shares also fell in early trade. London was down 0.5 percent, Paris fell 0.4 percent and Frankfurt lost 0.1 percent.

– Key figures around 0830 GMT –

Tokyo – Nikkei 225: UP 1.3 percent at 27,872.11 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 16,557.31 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,064.49 (close)

London – FTSE 100: DOWN 0.5 percent at 7,266.12

Pound/dollar: DOWN at $1.1476 from $1.1513 on Monday

Euro/dollar: DOWN at $0.9997 from $1.0023

Dollar/yen: FLAT at 146.69 from 146.68 yen

Euro/pound: DOWN at 87.10 pence from 87.03 pence

West Texas Intermediate: DOWN 1.2 percent at $91.49 per barrel

Brent North Sea crude: DOWN 0.8 percent at $97.74 per barrel

New York – Dow: UP 1.3 percent at 32,827.00 (close)