German sportswear giant Adidas today said its group firm Reebok India will offer voluntary retirement scheme to employees as part of a restructuring exercise in the company, which has been allegedly hit by a Rs 870-crore fraud by two former top executives.
The Indian arm, Adidas India, is also consolidating supply chain by combining vendors for both the brands in India, apart from streamlining franchisees for Reebok India.
"We are looking for a fresh start of Reebok India by 2013 and as a part of it we are offering voluntary retirement scheme (VRS) to all the staff of the company," Adidas Group, Managing Director (Market India), Claus Heckerott told PTI.
Reebok India has 200 employees and the VRS will be offered till the end of this month, he added.
Heckerott, however, declined to disclose the fund that has been earmarked for the scheme but said "the offer to the employees will be much more than the market average".
He also denied such a step is being taken up due to a lack of trust about some of the employees who had worked under the previous management.
"This offer is across the board of all employees, there are very good talent among them. We want to help them move on while we look forward to a new beginning under a new business model," Heckerott said.
Apart from the VRS, he said Reebok India is also streamlining the number of stores, under which the number would be reduced by one-third from the current 900 stores.
"As we are also changing the business model, with franchisees requiring to make their stores profitable, we expect that some of our existing partners will not be willing to take part in the current transition and hence there will be a decrease in number," he said.
Reebok India at present has about 600 franchisees across India, he added.
Commenting on consolidation of vendors, he said: "Both Adidas and Reebok will have common suppliers in future. There will be multi-brand suppliers and our level of engagement with them will increase in terms of our global standard, but the group's supplier base in India will be smaller going forward."
He said the Adidas group will be investing 70 million euros on the fresh start of Reebok India.
"This will be mainly the cost providing fresh products to our stores and also for withdrawing old items," he said.
In May this year Reebok India had filed an FIR alleging Rs 870-crore fraud by its former MD Subhinder Singh Prem and COO Vishnu Bhagat, which both of them have denied.
