Fila expects fillip from Reebok troubles
24 September 2012
Italian sportswear brand Fila expects that the decision by German competitor Adidas to reduce the number of its Reebok stores in India will significantly benefit its business, points out a report.
Adidas, which bought US rival Reebok in 2005 for $3.8 billion, has accused top former executives of Reebok India of fraud that led to the company losing Rs870 crore.
Adidas had indicated in May it would cut the number of Reebok stores in India by one-third. Last month, Adidas said it expects a fresh start for Reebok India only in 2013.
"We definitely expect our business to benefit from the Reebok-Adidas controversy ... the Reebok fiasco should definitely give us traction," Gene S Yoon, global chairman of Fila, told Reuters on Saturday.
Fila has 40 stores in India, and plans to set up 60 more by end-2014 with its Indian licensing partner Cravatex Ltd.
The company, which expects India to be a major growth driver for it along with China, will also invest heavily to expand its wholesale business, Yoon said.
Despite the Indian government permitting single-brand retailers to own 100 per cent of their Indian operations, Fila plans to sign a 30-year licensing agreement with its current partner, Gene Yoon said.