Reebok to open 150-300 stores in India in three years
Bangalore: Reebok, owned by German sportswear brand Adidas AG, may open 150-300 stores over the next three years in India as it promotes its new retail format and focuses on offering fitness-related products.
Reebok, which along with its former senior management is being investigated by Indian regulators for alleged fraud, had introduced a new retail format called the Fit Hub earlier this year in India.
The company has opened 33 stores in the new format, designed to appeal to people shopping for fitness-related products, so far and aims to have 100 such stores by spring next year.
“It’s a growing industry. I think we have the capacity to open somewhere between 50 to 100 stores a year in India (over the next three years),” managing director Erick Haskell said in an interview. “We tend to be present in metros and there’s some opportunity in some other cities we’re looking at. For example, our franchise partners in Karnataka are exploring opportunities in lower tier cities where they think the market is about to develop.”
Haskell said the company will eventually convert its entire store base in India into the new format stores.
Over the past year, Reebok shut roughly half of its 900 stores in India. The company’s stores are owned and run by franchises while Reebok looks after the advertising and marketing of the brand.
“There were difficult moments (in shutting the stores) but it was a cooperative process. We expanded too quickly and had stores that were not viable. The decision (to close stores) was based on viability of the store. So generally, it was a fairly easy conversation to agree that if the store is not profitable and we don’t see it becoming viable in the future, then we close it down,” Haskell said.
Regulators are investigating alleged financial irregularities involving Rs.870 crore at Reebok’s India unit. Adidas has blamed Subhinder Singh Prem, its former managing director, and Vishnu Bhagat, a former chief operating officer, for the irregularities, which surfaced in May last year. Prem and Bhagat were running Reebok India at the time the irregularities are alleged to have occurred.
Press Trust of India reported on 5 November that the ministry of corporate affairs is likely to soon decide on a report submitted by the Serious Fraud Investigation Office on Reebok.
Haskell declined to comment on the investigations and said the company will continue to cooperate with the regulators as and when asked.