Profit plunge

The sporting goods giant said it aims to save more than 100 million euros ($132.4 million) a year, after reporting a drop in operating profits to 58 million euros - well below analyst predictions.

Adidas' German home market is facing its most severe recession since World War II, with the government forecasting a 6 percent contraction. Retail sales there fell 1.5 percent in March.

Taken in net terms, profit dropped 97 percent for the first quarter. A company statement also said sales had fallen by just two percent, 2.58 billion euros in the first three months of the year.

Higher prices, restructuring costs hit bottom line

"We feel the effects of the economic downturn in many of our key markets," Adidas Chairman and Chief Executive Herbert Hainer said in the statement.

He added that the group's results had been "materially affected by higher input prices, currency devaluation effects and restructuring costs."

Adidas' plans to restructure its operations including the elimination of regional headquarters in Europe. "We are now in a position to make a game-changing structural refinement to our business," Hainer said.

New joint-model with Reebok

A joint operating model between adidas and Reebok would be implemented in Europe and Latin America following its successful roll-out in Asia, the statement said.

Adidas also plans to simplify the product creation process for both its own and Reebok brands.

The new organisational model would "set the foundation for sustainable long-term growth," it added.

Employee reductions were planned at the group's Reebok, Rockport and TaylorMade-adidas Golf divisions, the statement said, but no figures were provided.

Adidas competitors are also said to be planning to cut costs. Market leader Nike is looking into shedding some 1,400 jobs out of 35,000. And Puma aims to reduce costs by a third.