The commercial irregularities at Adidas’s Indian arm has punched a nearly €153-million (approximately Rs 1,000 crore) hole in its balance sheet for 2011.
Adidas said it has corrected its consolidated financial statements as on December 31, 2012, in which the comparative figures for the year 2011 are restated and the opening balance-sheet for 2011 is reported to the extent that earlier periods are affected.
Adidas made a fourth quarter operating loss of €239 million, compared with analyst expectations for profit of €28.6 million.
The company also said it has included “material mis-statements” in its consolidated financial statements of Adidas AG for the 2011.
“The results of these restatements led to a reduction of net income attributable to shareholders of €58 million for 2011. In addition, shareholders’ equity of the opening balance sheet for 2011 is negatively impacted by €153 million,” the company said in a statement.
Adidas has posted six per cent increase in overall sales to €14.9 billion, while its net cash position stood at €448 million.
Last year, Reebok India had filed an FIR alleging Rs 870 crore fraud by its former MD Subhinder Singh Prem and COO Vishnu Bhagat, which both of them denied. Following this, the company undertook a restructuring programme where in it moved from a minimum guarantee to a cash and carry model. It shut over 400 stores and gave voluntary retirement schemes to 200 employees.
Year of innovation
Tushar Goculdas, Brand Director, Adidas India, says that this is a year of innovation for the brand. To start with the company is focussing on various sports each month to achieve high double digit growth.
With March being dedicated to running, the brand has introduced ‘The Energy Boost’ running shoes. Priced at Rs 10,000, the shoes are being targeted at next Gen runners and youth. Goculdas claims that it has received good response.
He said during the coming months, the company will be targeting sports like cricket with exclusive IPL jerseys on offer and football with nitro-charge series of shoes.
Adidas said it will be retailing through its mono brands outlets and will also go aggressive on the e-commerce platform to boost its topline.
bindu.menon@thehindu.co.in