German sportswear maker Adidas is looking to tighten its belt in India, which may lead to reduction in employee strength and franchise partners in the country. The company, which owns Reebok, could lay off around one-fourth of its staff here in the coming months, said sources, and has been in talks with Reliance Brands to hand over a chunk of its franchise business. When asked about the impending firing, an Adidas India spokesperson said, “We will continue to strategically increase our focus and investments in India and we are not aware of any workforce reductions. Suggestions regarding this are entirely speculative. We regularly explore business partnerships across the industry, however, as a company policy we do not comment on any specific opportunity.”
Adidas has approval from the Department of Industrial Policy and Promotion (DIPP) to open its own stores in the country. It is keen on large-format stores as it feels bigger stores with a complete range of footwear and apparel has a better chance of becoming profitable. For this, it needs franchisees with deep pockets, and although it has reduced the number of its franchise partners to around 70 from 500 earlier, a further cut is on the cards. Darshan Mehta, Chief Executive Officer of Reliance Brands, said although talks with potential partners are an ongoing process, it would not be appropriate to divulge details of any negotiations, unless finalized.