Sports brand Adidas has pronounced strategy to add One hundred twenty five franchise outlets to its India retail network in 2008.
As said by Andreas Gellner, managing director at Adidas India Marketing, the count is set to rise to four hundred fifty by the end of the year, from the existing count of three hundred twenty five and will come up both in small towns as well as bigger cities.
Gellner also confessed that strengthening real estate prices have impacted Adidas’ plans in India, and that the prevailing rentals were nowhere near realistic.
The retail industry can support a maximum rental cost of around 15-17 % of its return per square feet.
However, existing rentals are over the 20 % per square feet, going up to 40 % per square feet in some cases. Therefore several retailers have shelved or scaled back their expansion plans, for want of cost effective retail space.
Adidas’ sales in India have developed at 30 % yearly for the last 4 yrs, and Gellner said the company is hopeful of the sales rising 30-% this year.
