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Business News/ Companies / News/  Adidas takes first step to reboot Reebok in India
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Adidas takes first step to reboot Reebok in India

Adidas has hired Silvia Tallon as Reebok India chief; will focus on fitness to drive sales

Reebok is now being repositioned as a fitness brand with a strong focus on women. It has also signed Bollywood actor Kangana Ranaut to endorse the brand in India. Photo: Hemant Mishra/Mint (Hemant Mishra/Mint)Premium
Reebok is now being repositioned as a fitness brand with a strong focus on women. It has also signed Bollywood actor Kangana Ranaut to endorse the brand in India. Photo: Hemant Mishra/Mint (Hemant Mishra/Mint)

New Delhi: “We need to bring brand Reebok to life (in India)," Dave Thomas, managing director at Adidas Group India, said over a phone call on Thursday morning.

Thomas, currently in Dubai on a business trip, was speaking about the appointment of Silvia Tallon as head of Adidas unit Reebok in India—an attempt to revive the brand languishing in this market for the last five years.

Tallon, who has been in marketing of fashion and sportswear brands for almost three decades, will be attempting to sharpen Reebok’s positioning in India, leverage the e-commerce channel for growth and engage India with global counterparts, said Thomas.

On sabbatical for few months before joining Reebok India, Tallon was working with the Russian apparel brand O’stin. She is the first non-Indian to head brand Reebok in the country since it entered the market as an American sports shoe brand in 1995, before its current parent, Germany’s Adidas AG, stepped in.

Reviving brand Reebok, which historically has sold more shoes in India than brand Adidas, will be an uphill task for Tallon, who has not worked in this market before.

In the last five years, Reebok’s operations have been managed by Adidas in India, unlike elsewhere in the world where the two brands are headed by different executives. The situation arose after Adidas, which took over Reebok globally for $3.8 billion in 2005, discovered financial irregularities by a few members of Reebok India’s former management team.

In the fiscal year ended March 2015, Reebok’s total revenue in India stood at 333 crore—less than half of Adidas at 805.13 crore. In the last few years, the German parent focused on brand Adidas and cut Reebok’s retail footprint to about 250 stores from more than 800 in 2013-14, even as the company took a hit of 870 crore due to the alleged fraud.

From a running-shoe brand, Reebok is now being repositioned as a fitness brand with a strong focus on women. It has also signed Bollywood actor Kangana Ranaut to endorse the brand in India.

Thomas chose Tallon over nearly 100 candidates, both Indian and international, for the position.

“For differentiation and strong positioning, any brand would need focus. Bringing in someone with experience across global markets adds value. It could result in generating interesting ideas for marketing which could help the brand to grow. It seems the right move," said Rajat Wahi, partner and head (consumer markets) at consultancy KPMG in India.

As part of a strategy to reposition Reebok in India, the parent has turned 150 of the 250 outlets as Fit Hub concept stores—the most in any market globally.

“We need to focus on profitability, not number of stores. We reduced the number of stores to turn profitable. We have seen results. Now, we need to sustain the profitable growth," said Thomas. Over the next few years, the company will close down all loss-making stores and turn others into Fit Hubs.

Tallon, who has joined Reebok India, has visited the country several times in the past during her stints with global brands such as Levi Strauss and Co., Intersport, Vanity Fair and O’stin in countries like Russia, Spain, Switzerland and Germany.

“She is very adaptive and versatile. She can do what Reebok requires in India," said Thomas.

Tallon was not available for comment.

Thomas and Tallon worked together in Germany between 2003 and 2006 when Tallon was heading the swimwear category for Adidas globally.

The German sportswear retailer is also planning to seek government approval for 100% foreign direct investment (FDI) to open company-owned stores for brand Reebok in India.

Currently, it operates through local distributors.

In November 2015, it received approval to open 100% foreign- owned large Adidas outlets in India. The first one is scheduled to open in the second half of the year.

Adidas now operates around 760 stores through franchisees, of which nearly 500 outlets sell only Adidas-branded products.

“By 2020, we will double our retail footprint," said Thomas, who consolidated its five distribution centres into a single facility to save costs.

In India, Adidas competes with Nike Inc., which entered the market in 1996 (it set up its Indian subsidiary only in 2004), and Puma SE, which came to India in 2005.

Japan’s ASICS Corp. opened its first standalone store in Delhi in July 2015, and US-based New Balance Athletic Shoes opened its first store in India last month.

According to retail consulting firm IMAGES F&R Research, the sportswear market in India— including footwear, apparel and accessories—was estimated at 6,000 crore in 2014-15.

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Published: 22 Apr 2016, 01:30 AM IST
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