Aditya Birla Fashion and Retail (ABFRL) has been quietly shoring up the retail presence of Reebok, the sportswear brand whose distribution rights it acquired in December 2021 for India and South East Asian countries at an estimated `100 crore from the Authentic Brands Group, Reebok’s new owner.

While the deal has helped ABFRL mark its presence in India’s Rs 20,000-crore organised sports footwear market, which has big names such as Puma, Adidas, Nike, Asics, Skechers and Decathlon lording over it, the Aditya Birla group has big plans for the brand. The sports footwear is growing at around 10% per annum.

Analysts and retail experts see ABFRL taking a leaf out of rival Metro Brands’ strategy to grow its footwear business in the country. Like Metro Brands, which in the last few years has focused aggressively on its international brand tie-ups such as Fila, Crocs and Fitflop, ABFRL, too, is looking to grow its footwear business on the back of an aggressive distribution and e-commerce expansion of Reebok.

On Friday, Metro Brands renewed its retail partnership with Crocs, which includes owning and operating the brand’s stores in the west and south of India, besides running stores in the east and north India. The renewal is expected to help Metro Brands aggressively expand Crocs stores from the current 200 outlets over the next few years.

For ABFRL, from 126 exclusive brand outlets (EBOs) at the start of FY24, it added nearly 40 stores in nine months to take its exclusive brand outlets (EBO) presence to over 160 outlets at the end of the December 2023 quarter. The company is also on track to cross `400 crore in sales in FY24 (`100 crore per quarter), it disclosed in its latest investor presentation and its EBO store count will be around 200 outlets (at the end of the March 2024 quarter).

Future plans include adding around 100 stores per annum over the next three years (300 stores in three years), retail industry sources said, as it looks to take Reebok’s retail footprint to 500 outlets by FY27. Executives at ABFRL were not immediately available for comments.

But in a recent earnings call, ABFRL’s CFO Jagdish Bajaj said Reebok operations were being scaled up quickly to take advantage of growth prospects in the market. The Reebok business was integrated into the company in the second half of FY23 after it was transferred to ABFRL in October 2022 following closure of the distribution deal with Authentic Brands Group.

“Reebok is now available at 160-plus stores and 800-plus points of sales across departmental stores and multi-brand outlets. The brand has also increased its e-commerce presence, driven by deeper partnership with all major e-commerce players,” Bajaj told investors after the company’s Q3FY24 results in February. The company is yet to disclose its Q4 and full-year FY24 financial numbers.    

“Brands like Reebok are finding very strong traction in India. So, they will grow at a much faster pace because there’s a very large opportunity available,” he added.

Big brand, fall from grace

Once a leader in the sports footwear category in India, accounting irregularities a decade ago (in India) as well as an inability to scale up operations amid heightened competition from rivals globally forced former owner Adidas to sell Reebok to Authentic Brands Group in August, 2021 for $2.5 billion.

Retail experts say that rival have emerged as big players in sports footwear over the last few years.

The combined revenue of Puma, Adidas, Asics, Skechers and Decathlon more than doubled to nearly Rs 12,000 crore in FY23 from Rs 5,022 crore in FY21, according to data from the Registrar of Companies (RoC).

Saloni Nangia, president and managing partner at Gurugram-based retail consultancy Technopak, says that growing health consciousness is driving the sports footwear market.

“The need to remain fit and to have the right sportswear for the purpose has fuelled the growth of the market,” she says.

ABFRL is running new campaigns for Reebok in India and its brand’s ambassadors for India include Bollywood actress Taapse Pannu and cricketer Surya Kumar Yadav.