New Delhi: The world's second largest sports goods maker Adidas AG Thursday said that it has decided to shut down about one-third of Reebok outlets in India as it looks to restructure business activities in the country, after noticing commercial irregularities at Reebok India.
At present, about 900 Reebok outlets are operational in India.
Adidas acquired its British rival Reebok for $3.8 billion in 2005, but the two firms merged in India only last year.
Earlier Monday, the Germany-based firm said in a statement that it has discovered commercial irregularities at Reebok India. "The currently estimated maximum negative impact could be up to a pre-tax amount of Euro 125 million," Adidas had said while announcing the financial results for the first quarter Monday.
Further, it also added that restructuring in India could cost it additional one-time charges in the remaining quarters of 2012 in an estimated amount of up to 70 million euros.
"Although Reebok has some challenges to overcome in Western Europe this year and as retailers currently focus on the major sporting events, we nevertheless continue to see good progress in most other regions," Chief Executive Officer Herbert Hainer said in a speech Thursday.
The sports goods giant, which recently replaced its top management at Reebok India, posted better than expected sales in China and Japan and 38% growth in net profit to 289 million euros. However, it posted a decline of 7% in India sales for the first quarter.
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