Adidas gets nod to open fully-owned stores in India
NEW DELHI: The government on Tuesday gave its approval to German sportswear and equipment major Adidas to open its fully-owned flagship stores in the country with 100% foreign direct investment (FDI).
It is the first instance when the department of industrial policy and promotion (DIPP) has agreed to allow any firm to operate through both fully-owned stores as well as franchise mode. Till now, the government’s policy of single brand retail did not permit a combination of both. Adidas had made its application to the DIPP in July followed by Nike.
Dave Thomas, managing director, Adidas Group India said, “We are working towards introducing the first companyowned retail store in the second half of 2016. While we are excited to introduce our own large footprint stores here, we continue to be committed to our partners and will strengthen our existing and successful franchise distribution network.”
Adding, that the companyowned retail channel will give additional flexibility to bring in global concepts across all categories in larger stores, thereby enabling the company to further enhance consumer experience.
The company currently has 760 franchise retail stores in India —including Adidas, Adidas Originals and Reebok. “We would like to take this number up to 1,000 stores by 2020,” Thomas said.
Adidas, like other brand retailers with over 51% FDI will have to comply with the mandatory 30% local sourcing norm within five years of incorporation.
The company however, refused to share the amount it will invest through FDI in India. Adidas’ license comes after Sweden’s furniture chain Ikea and fashion brands such as H&M and GAP got approvals under single-brand retail.