Adidas expects its sales and customer base in Reebok Indiawill halve once it has completed restructuring the business. “Revenues can even be less than half as we want to take only customers where we can build a healthy sustainable business,” Chief Executive Herbert Hainer said recently.
Chief Financial Officer Robin Stalker said Adidas had taken one-off charges of around 60 million euros (s 417 crores) related to the restructuring by the end of September with a further 10-15 million to follow in the fourth quarter. Their comments came in after the group slightly lowered its 2012 sales outlook earlier on lower-than-expected sales at Reebok.
After the group un-earthed an alleged Rs 870 crores scam in India, the two Reebok executives Subhinder Singh Prem and Vishnu Bhagat were sacked. The Gurgaon Police arrested Prem and Bhagat along with three others in September on charges of fake sale, maintaining secret warehouses, unauthorised franchise referral programme and overstating receivables from customers.
The Reebok scam is being probed by multiple agencies including the Income-Tax department under the finance ministry, the Serious Fraud Investigation Office under the corporate affairs ministry, and the economic offences wing of the Gurgaon Police.