adidas Considers Closing Reebok HQ in U.K

Speaking at a conference held by Cheuvreux in Frankfurt, adidas officials said the company will post a “high-single-digit” sales increase for 2008. Operating margin will be near 10% driving net income to increase at least 15%, according to Bloomberg News. The forecast matches guidance given with its Nov. 6 third-quarter earnings report.  According to the news service, adidas said young consumers, who are “insulated from economic pressures,” helped the company offset slowing economies and consumer demand.  adidas also said it had a “limited” requirement to refinance debt since only a small part will expire in 2009. Total debt as of Sept. 30 was €2.59 billion ($3.35 bn). The company said it will focus on reducing net borrowings this year.

Adidas announced plans to close Reebok's U.K. headquarter in the city of Bolton, affecting 160 jobs. According to published reports in the U.K., the move would end a 116-year association for the brand with the town. A spokesman for parent group, adidas, told The Bolton News: “It is a proposal at this stage, but it is our intention to relocate the offices based at the Reebok Stadium to adidas offices in Stockport, with some workers being offered a transfer to the global group HQ in Canton, near Boston, Massachusetts.”

The spokesman added that Reebok wants to relocate sales and marketing staff responsible for the U.K. and Ireland to offices in Stockport, and the product development team to the U.S. The company spokesman said: “The idea is to get the staff working together at the same locations but keep the separate brands.

“One of the reasons is that we need to make sure that, over the long term, the Reebok name is taken forward in a very strong way. The plan is currently in the consultation process and we will be holding one-to-one interviews with all staff. This has not been an easy decision, but we are handling it in the best way we can.”