Adidas and Reebok expect rapid growth in Asia

Adidas AG expects growth overseas, particularly in Asia, to push sales at its Reebok division to US$5 billion over the next three to five years, up from their current US$3 billion level. The world's second-largest sporting goods maker after Nike Inc also expects to cut costs across the company (including at Reebok which it acquired last year) to offset integration costs and resulting in an overall cost savings of about $13 million to $26 million.

"For the Reebok brand, the main growth driver will be Asia, to a certain extent Europe as well," Herbert Hainer, chairman and chief executive of Adidas, said in an interview with Scott Malone of Reuters. "Key markets like Germany and France are underdeveloped, as is Russia. Emerging markets have a huge potential and we will grow in the US, but by far not at the pace of Asia."

Much of that growth will come toward the latter part of that period, though, with the brand expecting only "modest" revenue growth of mid-single-digit percentages, said Paul Harrington, president and CEO of the Reebok brand. Reebok's sales have been lagging in the United States and the United Kingdom, though Adidas plans a big expansion for the brand in Asia, including about 3,200 stores in China, India and Russia by 2010. This year Reebok aims to open 90 stores in Russia and 200 in China, Harrington said during a presentation in this suburb about 20 miles south of Boston. Hainer said he also sees Japan and South Korea as ripe for Reebok expansion.