Adidas Group announced a three-pronged strategy in India that would include the possible closure of nearly a third of its 900 Reebok stores there, a voluntary retirement scheme (VRS) for the approximately 200 Reebok employees and integration of the two brands’ suppliers.
also indicated that said the financial irregularities discovered for
financial year 2011 might have started much earlier and the company
would not hesitate to open the accounts of previous years for
investigation, if required, according to Business Standard.
for the first time after the group announced it had taken a hit of Rs
870 crore as a result of alleged financial irregularities committed in
Reebok India in 2011, Claus Heckerott, managing director of Adidas,
group-market India, said, “We are changing our model from a minimum
guarantee scheme (rent plus model) offered to franchisees, which is not
sustainable for a cash-and-carry model. One-third of the franchisees are
ready to go with this model. The others are not sure or will not go.
However, we’ll be happy with 300 outlets, provided they are profitable.
We had started slowing down the opening of new stores from 2010.”
Business Standard noted that the discovery of alleged financial
irregularities led the company to sack former Reebok India managing
director Subhinder Singh Prem and former chief operating officer Vishnu