Adidas to reduce costs in India by restructuring operations

By

Isabelle Crossley

Published
Mar 8, 2018

Although Adidas remains committed to investing in India in the long run, a new wave of cost cutting initiatives will see operations restructured in the country.

The Germany-based sportswear brand Adidas is currently closing down non-performing stores in India in an effort to reduce costs. Alongside this, product lines including Adidas Originals, Football, and Premium Running are being moved out of India and will be transferred to other countries including Dubai.

Other operations are also being transferred to Dubai including the heads of several departments. These include marketing and human resources whose heads will report directly to the brand’s Dubai headquarters in the future.

“Our commitment to India remains unchanged,” an Adidas India spokesperson told the Economic Times. “We will continue to invest in creating exciting brand experiences for Indian consumers and to drive our global strategy of ‘Creating the New’.”

The spokesperson addded that Adidas is working to adapt to the differences in the Indian market and in consumers’ buying habits. The brand is currently expanding online in India and is still opening stores but the aim is to streamline the whole operation to best fit the Indian market.

Adidas, which is India’s largest sportswear company, reported a revenue total of 1,513 crore rupees (approximately 227.4 million US dollars) for the financial year 2016/2017 with a profit of 113 crore rupees (approximately 17 million dollars). Therefore, the move to cut costs is not prompted by great losses by more by the need to remain ahead of the competition as brands such as Puma and Skechers which have entered the country recently are growing fast by selling cheaper products.