Russian subsidiary records first positive result since brand’s departure
The Russian legal entity of German sportswear giant Adidas has reported its first annual profit since the company ceased operations in the country four years ago. According to corporate filings, Adidas LLC generated 2.2 billion roubles in net income during 2025, reversing a loss of 49.9 million roubles recorded the previous year. The subsidiary’s revenue increased by 20% to reach 3.9 billion roubles, though this growth did not stem from product sales.
Bank deposits and licensing drive financial turnaround
The profitability emerged primarily from interest earned on substantial bank deposits, with financial documents revealing interest income of 2.9 billion roubles from deposits yielding over 20% annually. The entity maintained approximately 15 billion roubles in liquidity placed in these high-yield accounts. Additional revenue streams included increased income from property rentals, royalty payments, and licensing agreements, though the company has not conducted commercial operations since its market exit.
Market departure followed invasion of Ukraine
Adidas announced its complete withdrawal from the Russian market in early 2022 following Moscow’s full-scale invasion of Ukraine. The company closed all its approximately 150 retail stores, suspended online sales, and publicly stated it had no plans to return. Some former Adidas locations were transferred through sublease agreements to Lamoda, which subsequently opened multi-brand Lamoda Sport stores in their place. Adidas products currently available in Russia reach consumers through grey imports, local distributors, or counterfeit channels.
Tax contributions continue amid operational shutdown
Despite the absence of commercial activity, the Russian subsidiary continues to fulfil its tax obligations under local legislation, meaning a portion of its passive income flows into state coffers. These budgetary contributions occur while the Kremlin continues to finance its military campaign against Ukraine and hybrid confrontation with European nations. The situation creates significant reputational challenges for Adidas, as European consumers and partners may perceive continued economic presence as contradicting declared ethical business positions.
Geopolitical implications and corporate dilemmas
The profitable Russian entity presents potential propaganda opportunities for Moscow, which could frame the situation as demonstrating the ineffectiveness of Western sanctions. Kremlin narratives might suggest that major international brands still benefit financially from maintaining Russian structures despite official exit announcements. Corporate governance experts note that Adidas faces increasing pressure to consider liquidating its Russian legal entity entirely to align operational practice with stated market exit positions and mitigate political risks.
