Saturday, 9 March 2013

Reebok shutting shop in India?

Wondering why you can’t find just the pair of Reebok shoes you need? Why every time you visit the retail store, they either show the same old designs or say this particular one is out of stock?

A channel check reveals most exclusive Reebok outlets have got no fresh supplies in the past 4-5 months.

Of the multi-brand outlets, the less said the better. These have had no new stock for the past 6-8 months.
Several store dealers DNA Money spoke to confirmed the stoppage of supplies.
So much so, many suspect the brand is on the verge of folding up operations in India.

Some exclusive dealers, though, have pinned their hopes on a company assurance that replenishments will be made in March. But there’s no saying just yet.

The trouble started last year when Adidas, which owns Reebok, said it’s looking to slash India storecount by one-third following alleged financial irregularities to the tune of Rs870 crore at Reebok India. It has been reported that Adidas has been facing trouble with its franchisee on several other fronts, too. The result:

These franchisee outlets have been offering deep discounts to clear off the inventory. And all this has fuelled speculation that it may be the end of road for Reebok in India.

But the management vehemently refutes such arguments. “There were restructuring efforts made in 2012 to give Reebok a fresh start for 2013. And we see great potential for brands in India,” clarified a spokesperson from Reebok India Company. Herbert Hainer, global CEO of Adidas, chipped in, saying the company is fully committed to its India story.

The fraud is currently being probed by the Serious Fraud Investigation Office, which in turn has forced Adidas to write down as much as `1,090 crore from the 2012 balance sheet. Two ex-officials Subhinder Singh Prem and Vishnu Bhagat have been charged with siphoning off the money.
http://www.dnaindia.com/money/report_reebok-shutting-shop-in-india_1808665

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