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Adidas has previously said that it has a

“zero tolerance approach to slavery and human trafficking.”

In a statement from October 2019, it said that when

“learning of allegations against several companies sourcing from Xinjiang, China, where ethnic minorities were reportedly subject to forced labor in spinning mills we explicitly required our fabric suppliers not to source any yarn from the Xinjiang region.”

It added:

“Adidas has never manufactured goods in Xinjiang and has no contractual relationship with any Xinjiang supplier.”

Meanwhile, this year, the German retailer also joined the Better Cotton Initiative, a non-profit which opted to suspend its activities in Xinjiang last year on the back of concerns over human rights.

Adidas and other Western brands, including Nike and H&M, faced a backlash on Chinese social media following their comments regarding the situation in Xinjiang. Some Chinese consumers have boycotted the brands and opted instead to buy products from domestic companies.

Adidas did not explicitly refer to the issue in Friday’s earnings release, but did cite “adverse impacts” from issues including “the geo-political situation.”

Kasper Rorsted, CEO of Adidas, told CNBC that he still expects “very strong growth” from China for the year overall.

“So, we are still very confident we will continue to build our position in China, which is the single biggest market for us,”

he told CNBC’s Squawk Box Europe Friday.

“This is of course a sensitive topic and we are doing whatever we can to make sure human rights are protected.”

However, despite the controversy, Rorsted said he does not think there will be a major shift in the company’s supply chains.

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