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Adidas gets approval for FDI in retail

Economic Times:  August, 2016

Kolkata: Adidas India has received the government's approval to bring in foreign direct investment (FDI) in retail through its existing wholesale entity, and won't have to set up a separate retail company for the purpose.

The company plans to open 30-50 company-owned Adidas stores in large cities by 2020, and will file another FDI application by this month for Reebok to set up its company stores.

Adidas Group's managing director for Indian operations Dave Thomas said that as per the new government approval received last week, the existing Adidas wholesale entity can set up its own retail stores and also start its ecommerce venture.

"The company-owned stores will come up from the middle of next year, with the first few in Delhi where we will have 3-4 outlets across formats - the premium HomeCourt and Adidas Originals Neighbourhood formats and one factory outlet," he said.

The group first received the FDI approval for Adidas stores last October, which required the company to set up a separate entity for company-owned retail and ecommerce since the existing entity was into cash-and-carry wholesale trading.

However, the government subsequently revised the norms in November allowing manufacturers to sell their products through wholesale, retail and ecommerce channels for the first time. Adidas, which locally manufactures more than 70 per cent of what it sells in India, subsequently reapplied earlier this year.

Thomas said that next in line will be retail FDI application for the Reebok brand which the group plans to file by August. The application will seek permission for both brick-and-mortar stores and ecommerce venture.