Adidas Plans to Shut Down

Under the new leadership team, Adidas is planning an accelerated restructuring of its business activities in India including significant changes to its commercial business practices. This could lead to additional one-time charges in the remaining quarters of 2012 in an estimated amount of up to 70 million euro’s.

An Anonymous person who works for Adidas said that they did not like the way Reebok worked and so their partnership with Reebok was not very profitable for them and the official person also added that the company is planning to shut down about 400 stores (this was mentioned by Economic Times).

Their first step would be to shut down Rockport stores and Reebok junior stores and may also change their business model and commercial terms with franchisees. The company is also changing its so called ‘minimum guarantee model’ to ‘cash and carry model’ wherein it will sell to franchisees and not take back any unsold inventory.