German sportswear major adidas is looking at “re-emergence” of the Reebok brand in India in 2016. (adidas had acquired the US-based Reebok in 2006.)
Reebok’s operations in India took a hit after the 2012 controversy that saw an alleged fraud come to the fore.
According to Dave Thomas, Managing Director, adidas India, it was expecting a growth in business because of increased sales and further investments (into the brand). “In 2016, you will see the re-emergence of the Reebok brand in a strong commercial sense. We are looking to invest in Rebook next year through a commercial range, more value at different price points. You will see some real value offerings at different price points, something that we have been missing,” he told
According to Thomas, the brand equity of Reebok did not take a hit, despite the 2012 controversy, “We still have a strong brand,” he added. Reebok has 300-odd stores in the country, of which, 40 are “Reebok Fit Hub” ones. Fit Hub stores sell premium products and provide fitness consultation to customers. Plans are also afoot to introduce the premium brand – “Reebok Classic” – in India, through standalone stores.
After the controversy hit Reebok, parent adidas took a number of steps to script a turnaround.
The subsequent repositioning of Reebok as a “fitness brand” – which saw the introduction of Fit Hub stores – is said to be one such exercise.
Sources say the move to close down some Reebok stores is part of the turnaround strategy.
“Post the 2012 controversy in Reebok India, we took number of steps to correct the business practices of Reebok India and built a sustainable business model. In doing so, the company reviewed the number of stores operating at that point in time,” Thomas said.
The adidas Group has come up with a joint operating model – one MD heading both adidas and Reebok.
Reebok, which operates through franchisees, and a wholesale and distributor model, the model has gone through changes.
“We have converted to a risk-and-reward model of operations with our partners,” Thomas added. But Reebok still “isn't profitable”. Reebok could be back in black in 2017. “In terms of commercial success, we might be behind because of a variety of reasons. But we are addressing them. Profits, I say, will come perhaps in 2017,” he added.