Adidas says it remains committed to sourcing in China and will continue to work with more than 300 suppliers there despite shutting its only company-owned Chinese apparel factory earlier this year.

Adidas said in an e-mailed statement to, “China has been, and will remain, a key sourcing market for the adidas Group. It is true that we are rationalizing our sourcing structure and this has resulted in the termination of contracts with 10 suppliers. Nevertheless, adidas has fulfilled all of its contractual obligations with the suppliers to the satisfaction of all parties and will continue to partner with more than 300 supplier factories in China.” 

According to China Business News, Adidas may face legal action after it terminated contracts with several Chinese suppliers. They say they are not satisfied with the compensation they received because machines and software systems were tailored for Adidas.

In August, Adidas said it would close an apparel factory in Suzhou, in Jiangsu province, as well as terminate contracts with five suppliers in the country as it restructures its China sourcing infrastructure to gain efficiencies.

The company also said earlier that it plans to open 500 to 600 stores in lower-tier cities by the end of the year mainly in the western and northwestern parts of China.