Adidas blames ‘commercial irregularities’ for changes in India
30/04/2012
Adidas said the irregularities resulted in a change of leadership at its India business in March this year, when two top executives at the Adidas Group in India left the company..
At the time the executives left, the Times of India said it had learned that the departures were linked to “swirling allegations of financial discrepancies and losses” at Reebok in India.
The company did not provide more information about the investigation into its Reebok business in India, but it highlighted that there has been a management overhaul.
In the statement accompanying its first-quarter results, adidas said: “Management assures its stakeholders that it has, and will continue to, vigorously pursue a course of action to protect the group’s interests, which has already resulted in the appointment of a new local leadership team in India at the end of March.
“Under this new leadership team, management is further planning an accelerated restructuring of its business activities in India, including significant changes to its commercial business practices.
“This could lead to additional one-time charges in the remaining quarters of 2012 in an estimated amount of up to EUR70 million.”
At the same time, the firm said first-quarter net income increased. The firm’s profit was EUR289 million in the quarter, up 38% from the previous year, and it also raised its annual sales target. It now expect sales to rise 10% this year.
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