| Adidas may boot Reebok agents |
| Last Updated(Beijing Time):2006-12-08 12:11 |
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Dozens of Reebok sports products dealers may have to close as a result of the company's acquisition by Adidas.
Adidas, the world's second-biggest maker of athletic shoes and apparel, said yesterday it is evaluating the Reebok dealers and will phase out some of them after it takes over Reebok's distribution channels at the beginning of next year. The move could affect more than 60 Reebok agents.
"There's no question that we'll have to eliminate some dealers who are producing enough sales and are not in line with our future strategy," said Shu Hai, head of the legal affairs department at Adidas China. "But so far, there's no detailed schedule."
The decision raised concern among Reebok distributors who were encouraged earlier this year to stock more products and open more outlets. Some even started to slash retail prices to get rid of the inventory.
"I have more than 1.7 million yuan (US$217,000) worth of inventory, and I won't be able to sell Reebok if Adidas doesn't sign a new contract with me after the current one expires in a few weeks," said Yu Bing, a dealer in Nantong in Jiangsu Province.
The dealer is offered discounts up to 70 percent at its four stores in Jiangsu. Yu has joined two other dealers to negotiate with Reebok China Ltd for solutions. Reebok, however, has not responded, the dealer said.
Adidas-Salomon AG spent US$3.8 billion to acquire rival Reebok International Ltd last year. Under the deal, Adidas will get distribution rights to Reebok products in China starting on January 1.
Shu said the company will adopt a differentiated marketing strategy for Adidas and Reebok, and the sales networks for the two logos will operate separately.
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