INDIA: Adidas considers Reebok store closures
Adidas has revealed it may close as many as a third of its stores in India as part of plans to maximise profitability in the market.
Speaking to investors yesterday CEO Herbert Hainer said the company will "accelerate and and more aggressively restructure our business activities in India, including significant changes to our commercial business practices".
The announcement follows a warning last month that "accounting irregularities" of up to EUR125m had been discovered in its Indian operations. The company appointed a new local leadership team in the country at the end of March.
Hainer said the situation in India, "although unfortunate," will allow it to accelerate plans to "improve a specific underperforming part of our business".
The plans could result in a reduction of its Reebok franchise store base by "about one-third" as it focuses on maximising future profitability in the market.
"These, along with other planned actions, could lead to additional one-time charges in the remaining quarters of 2012 in an estimated amount of up to EUR70m. Rest assured, our goal is to begin 2013 with a clean sheet in this market," Hainer said.
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