Aiming cost cutting, Adidas restructures India operations : Reports

Aiming cost cutting, Adidas restructures India operations : Reports - InsideSport

Even as the Union Government has given Adidas a go-ahead to operate fully-owned, single-brand retail stores in India, the German sportswear manufacturer is reportedly restructuring its India operations to cut costs.

The news comes almost a fortnight after Adidas Brand Activation Director Amrith Gopinath was reported as saying that the multinational sports, athleisure and fitness wear and shoes brand was planning to open large stores in the country on the lines of its outlets in major markets across the world.

However, now national daily Times of India has reported that apart from shutting down non-performing stores, Adidas has also moved its key verticals, including Originals, Football and Premium Running out of India to places like Dubai.

Adidas has also adopted a new organisational structure through which heads of several functions, for instance, marketing or HR, may report directly to its headquarters in Dubai, states the ToI report quoting sources.

“Our commitment to India remains unchanged. We will continue to invest in creating exciting brand experiences for Indian consumers and to drive our global strategy of ‘Creating the New’,” TOI has quoted an Adidas spokesperson as saying.

Adidas Group, India’s largest sportswear company, has posted revenues of ₹1,513 crore with a net profit of ₹113 crore in 2016-17.

The company aims to streamline operations for increasing efficiency and reducing overall costs as it is facing fierce competition from established players such as Puma and new entrants like Skechers as both these rivals have a more affordable range of products. A premium jogger from Adidas costs around ₹22,000, while Skechers’ most expensive shoe is priced in the range of ₹9,000.

The Adidas India spokesperson said the company has opened larger stores in international formats — both company-owned and franchise-led and has beefed up its digital focus in India. Adidas’s arch-rival Nike, known for its premium sportswear, also recently moved a major part of its operations to Singapore, after reducing store count in India.

Adidas, which also owns brand Reebok, has a footprint of over 450 stores in India.