Aditya Birla Fashion and Retail Arm Plots Reebok's Comeback in India

By Consultants Review Team Tuesday, 02 April 2024

Aditya Birla Fashion and Retail (ABFRL) has been gradually strengthening the retail presence of Reebok, the sportswear brand whose distribution rights it purchased from the Authentic Brands Group, Reebok's new owner, in December 2021 for South East Asian and Indian markets at an estimated cost of ~100 crore.

The Aditya Birla group has great hopes for the brand, even if the transaction has helped ABFRL establish itself in India's 20,000-crore organized sports footwear sector, which is dominated by large brands like Puma, Adidas, Nike, Asics, Skechers, and Decathlon. Sports footwear is expanding at a rate of about 10% annually.

Retail analysts believe that ABFRL is imitating rival Metro Brands in order to expand its shoe business in the nation. Similar to Metro Brands, which has concentrated heavily in recent years on its foreign brand partnerships, including Fila, Crocs, and Fitflop, ABFRL also hopes to expand its footwear business by capitalizing on Reebok's rapid distribution and e-commerce growth.

In addition to managing Crocs stores in the east and north of India, Metro Brands and the brand's owners in the west and south of the country extended their retail cooperation on Friday. Over the next years, Metro Brands plans to rapidly grow the number of Crocs stores from the present 200 locations. This will be made possible by the renovation.

ABFRL increased its exclusive brand outlets (EBO) footprint to over 160 outlets at the end of the December 2023 quarter, up from 126 EBOs at the beginning of FY24 thanks to the addition of almost 40 stores in just nine months. According to the company's most recent investor presentation, it is also on pace to surpass `400 crore in revenues in FY24 (~100 crore each quarter), and it will have 200 EBO stores by the end of the March 2024 quarter.

According to retail sector insiders, future plans call for building about 100 locations annually over the next three years, or 300 stores in three years, in an effort to increase Reebok's retail footprint to 500 outlets by FY27. ABFRL executives were unavailable for comment at the time of writing.

However, ABFRL's CFO Jagdish Bajaj stated during a recent earnings conference that Reebok activities were being swiftly ramped up to capitalize on market growth opportunities. The Reebok business was brought into the firm during the second half of FY23. Prior to that, in October 2022, it had been transferred to ABFRL after the distribution agreement with Authentic Brands Group was closed.

"More than 800 points of sale, including department shops and multi-brand outlets, currently carry Reebok. Deeper partnerships with all major e-commerce firms have helped the brand expand its e-commerce footprint, Bajaj informed investors in February following the company's Q3FY24 results. The corporation has not yet released its Q4 and FY24 full year financial figures. 

In India, brands such as Reebok are gaining significant appeal. Because there is so much potential, they will thus grow much more quickly," he continued.Bollywood actress Taapse Pannu and cricket player Surya Kumar Yadav are the brand ambassadors for Reebok in India, where ABFRL is currently executing fresh campaigns.

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