Fila expects Adidas-Reebok problems to benefit its business in India
MUMBAI, Sept 24 |
MUMBAI, Sept 24 (Reuters) - Italian sportswear brand Fila expects the decision by German competitor Adidas to reduce the number of its Reebok stores in India will significantly benefit its business as it looks to expand in the country.
Adidas, which bought U.S. rival Reebok in 2005 for $3.8 billion, has accused top former executives of Reebok India of fraud that led to the company losing 8.7 billion rupees ($161 million).
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 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, which has 40 stores in India, 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 percent of their Indian operations, Fila plans to sign a 30-year licensing agreement with its current partner, Gene Yoon said. (Reporting by Nandita Bose; Editing by Prateek Chatterjee)
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