Reebok seeks premium image, snaps ties with online retailers

In keeping with its strategy of premium positioning and expansion of niche retail outlets, Reebok under its new management, appointed by Adidas group worldwide, has decided to severe ties with online retailers. Typically, an online retailer sells Reebok items at dead cheap prices.

Somdeb Basu, brand director, Reebok India, told Financial Chronicle that the company has stopped supplying to the online retailers. “At present, online retailers are selling old stocks that they had taken in the previous year,” added Basu.

Online retailer, for instance, is selling a Reebok wrist watch at a highly discounted price of Rs 399 while Reebok Reignite deodorant for men is sold for Rs 165 and aviator sunglasses for Rs 699. Similarly, Shopping. is selling Reebok stripe polo with Reebok watch that are available at outlets for Rs 3,898 at Rs 699 and Reebok mobile trainer shoe with three pack of TNF socks priced at Rs 3,599 for Rs 999. The company had asked its franchisees to liquidate products at discounts of up to 50 per cent by the end of 2013.

Harminder Sahni, founder director of Wazir Advisors, said, “This could be a strategy to liquidate their old merchandise and focus on premiumisation. Brand positioning usually takes a heavy beating with such discounts whether online or offline,” added Sahni.

Meanwhile, Reebok India plans to open 400 more new retail outlets and 100 new Reebok Fit Hubs by March 2014. The retail major owns around 425 outlets across India. “We are trying to re-position Reebok as multi-fitness brand,” added Basu.

The company has recently launched Reebok One Series shoes priced at around Rs 10,000. Reebok has several celebrities, including John Abraham, MS Dhoni, Gautam Gambhir, Yuvraj Singh and Harbhajan Singh, as its brand ambassadors. The company faced major issues after a fraud was discovered in its Indian division. The company also plans to have multi-brand suppliers, say industry experts. The premium-brand sportswear market in India is estimated to be around Rs 20,000 crore, 70 per cent of which is controlled by Reebok and Adidas. The rest of the market is controlled by brands such as Nike and Puma.

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