Adidas' Indian 'irregularities'
Tuesday 01 May 2012
Adidas, the sports brand with the famous three stripes, revealed yesterday that it is dealing with certain unexplained "commercial irregularities" at its Indian arm.
The company has begun an investigation into the issue, but declined to give details.
The German giant said it planned to make "significant changes to its commercial business practices" in India and had brought in new, local management last month.
"Due to the sensitivity of the ongoing investigation, specific details will be disclosed as appropriate in due course," Adidas said.
Meanwhile, the company has just raised its profit goals for 2012 after a strong first quarter. Sales rose 17 per cent to €3.8bn (£3.1bn), while profits leapt 38 per cent to €289m.
The quarter was Adidas's fifth in a row of double-digit sales growth.
Its chief executive Herbert Hainer said investments were "yielding an unprecedented period of growth for the group".
The Indian issue, whatever it is, could end up hitting the accounts by up to €125m. Adidas shares rose more than 6 per cent in early trade yesterday to a record €63.75.
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