German sportswear maker Adidas will cut one-third of its 900 Reebok stores in India citing “commercial irregularities” and aggressive restructuring as the reasons.

The unexplained irregularities said to be worth 125 million euros (US$162.21 million) were revealed by Adidas on Monday, however, the company declined to further elaborate.

“Due to the sensitivity of the ongoing investigation, we cannot comment further than we already did on Monday,” said Adidas Group CEO Herbert Hainer, who added that the company will begin 2013 with a clean sheet in India.

“The implementation of new commercial initiatives and terms could result in a reduction of our Reebok franchise store base by about one-third, as we focus on maximising our future returns in the market,” Hainer said.

Adidas will face charges of up to 70 million euros (US$92 million) due to its problems in India.

Meanwhile, Adidas – distinguishable by its three-stripe logo – is performing well in China, surpassing rivals Puma and Nike.

“We definitely do believe that our momentum in China is great, that it will continue and we foresee double-digit sales growth for the years to come,” said Hainer.

Adidas recorded a strong performance of 17 per cent revenue increase in this year’s first quarter to 3.8 billion euros (US$4.9 billion) from 3.2 billion euros (US$4.1 billion) in 2011.

GB