In a major retail push, German sportswear maker Adidas is
planning to earn 20% revenue from its own stores in India by 2020. At present,
it operates a franchise-based model here, similar to ones followed by its
competitors Nike and Puma.
To begin with, the company plans to open around six flagship
stores in large cities, measuring 5,000-10,000 square feet .
Envisaging larger volumes, it has also opened a 2.6 lakh square-feet centralized
warehouse near the Capital to streamline its supply chain, akin to the ones
operated by e-commerce companies.
"We want to double our turnover to around Rs 1,600 crore by
2020 from Rs 805 crore at present. These large format stores will help us
achieve that," said Dave Thomas, MD of Adidas Group India. "Our
franchise partners were earlier hesitant to invest in these big stores. That
mindset is changing. However, most of these flagship stores will be owned by
us."
Last year, Adidas became the first sportswear company in the
country to get government approval to open its own stores.
This year, Adidas wants to turn its focus on its lifestyle brand
Adidas Originals, which accounts for a third of its global business but only 5%
in here. "We will launch new formats of Adidas Originals stores here.
Earlier, Originals products wouldn't sell here. But now, with increased
awareness, the products are flying off the shelves. There is a lot of potential
in that line," said Thomas.
While around half of Adidas's business here comes from apparel,
Thomas said the trend is changing. "People are buying more expensive
footwear. Two years ago, the average buying price of a pair of sports shoes was
around Rs 3,000. Now, it's around Rs 5,000," said Thomas.
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