Adidas allowed 100% FDI, nod for Nike likely soon

The government has allowed German sportswear major Adidas to open fully-owned retail stores in the country under the single brand retail FDI policy, which will mean that the company will get to operate on its own across the country.

The centre under its FDI policy allows 100 per cent foreign investment in single brand stores and the department of industrial policy & promotion (DIPP) clarified that such companies can operate through a mix of fully-owned stores and franchise outlets.

Adidas, which currently operates through franchise stores, had applied in July soon after the DIPP clarification that they could operate through more than one joint venture.

Following the DIPP clarification, US sportswear maker Nike has also applied for approval for setting up fully-owned stores in the country. The department had earlier not considered Nike's application.

''We strongly believe our own retail will enable us to take our market leadership position to an even higher level. It will give us additional flexibility to bring in global concepts across all categories in large stores,'' Dave Thomas, managing director of Adidas Group India, said.

Adidas aims to open its first own retail store in the second half of 2016 while simultaneously expanding distribution through the franchise distribution network.

''We have 760 franchise retail stores in India, across Adidas, Adidas Originals and Reebok. We would like to take this number up to 1,000 stores by 2020,'' Thomas said.

Thomas, however, did not specify the size of the company's proposed investment or the number of fully-owned stores it will open in the country.

He said the company is augmenting its omni-channel strategy. ''We will increase the number of stores covered under omni-channel retailing to 200 (from 150) by the end of this year and to 400 by April 2016,'' he added.

Several single brand retailers are likely to enter the country once Adidas sets up own stores. These could lead to the setting up large-format stores, offering Indian consumers a better shopping experience.