Scam-stung Adidas to churn out Reebok ‘Fit Hubs’ for India
11 Jun 2013
German sports-gear maker Adidas is repositioning its Reebok brand as a premium fitness shop in India rather than just a seller of sports ware.
The company plans to open 100 premium Reebok Fit Hubs by March next year to provide fitness consultation to customers, apart from selling top-market products like shoes priced at as much as Rs12,000 a pair.
"Our new stores will have certified fitness trainers in these stores who will advise the customers on matters related to fitness," Erick Haskell, managing director for the Indian arm of Adidas AG, said today.
"Apparel will be delineated under categories such as yoga, dance and others. It will be an entirely new experience for the customers, something that they have not seen anywhere," he told newspersons in New Delhi.
The first two Fit Hubs will come up in Faridabad and Gurgaon, close to the National Capital Region. The company plans to open five such stores this week - no doubt at least one of them will be in Bombay, the financial capital of India.
Last year, a Rs870-crore accounting scam was uncovered in Reebok India and Adidas fired the then managing director Subhinder Singh Prem and chief operating officer Vishnu Bhagat after accusing them of siphoning off merchandise by creating secret warehouses (See: Reebok India alleges Rs8,700-cr fraud by sacked top execs).
Under the new model, Reebok will spend on development of new concepts in marketing and brand building, while franchisees take care of setting up stores and other fixtures.
The company offers franchisees a margin on the overall sales. This is the same model that the company has adopted for its operations in China.
Of course it cannot hope to gain as much from India as from China. Apart from anything else, this is not a sporting country - even the most expensive schools hardly have full-fledged sports grounds.
Adidas is clearly relying on the urban rich who will spend money on anything that smells exclusive.
Cricketer and Reebok brand ambassador Gautam Gambhir will launch the first two Fit Hub stores. Reebok has also signed two Bollywood actors as its brand ambassadors, whose names have not yet been revealed.
Haskell also said the brand will continue to work with India's cricket captain M S Dhoni despite recent controversies over a conflict of interest issue on his involvement with sports management company Rhiti.
