(CNN) -- Adidas will shut down regional headquarters in Europe and Asia in a €100 million ($132 million) cost-cutting drive, the German sports manufacturer said Tuesday as it announced a 97 percent plunge in first quarter net profits.
Adidas' net profit for the quarter was just €5 million ($6.7 million), compared with €169 million ($226 million) for the equivalent period last year. In a statement, Adidas said restructuring costs related to its 2006 purchase of Reebok, currency devaluation and rising costs had damaged profitability.
"We've faced a number of economic and market challenges in the first quarter of 2009," Adidas CEO and Chairman Herbert Hainer said.
"Our results have been materially affected by higher input prices, currency devaluation effects and restructuring costs. Although some of these items will recur again as we go through the balance of the year, I am convinced we will put most of these effects behind us in the current year."
Adidas said creating a new organizational structure and shutting down regional offices would lay the foundations for long-term growth after eight years of double-digit growth.
"All initiatives we have taken or which we are now implementing are built and executed under one guiding principle: to bring the Adidas Group's brands and products closer to the consumer. The current economic climate adds urgency to accelerate our plans," Hainer said.