German sportswear maker Adidas has decided to shut down 300 of its 900 Reebok stores
in the country in a move to restructure its business amid the financial
irregularities discovered in its India operations.Adidas Group chief executive
officer (CEO) Herbert Hainer said on Thursday that the problems in India could
lead to further charges of up to €70 million ($92 million) for the company,
which needs to revamp its franchise model for Reebok India.
"The
implementation of new commercial initiatives and terms could result in
reduction of our Reebok franchise store base by about one-third as we focus on
maximising our future returns in the market," Hainer said while announcing
the group's earnings in Germany
on Thursday.At present, Rebook has about 1,000 outlets in the country.
Adidas,
which on Monday had disclosed "commercial irregularities" to the tune
of €125 million in Reebok India,
said that the goal for the year 2013 is to begin with a clean sheet in the
market.
Hainer,
however, did not elaborate on the kind of commercial irregularities found in
Reebok India.
"Due to the sensitivity of the ongoing investigation, we cannot comment
further than we already did on Monday," he said.