Adidas expects growth overseas, especially in Asia, to push sales at Reebok to roughly $5 billion from their current $3 billion, over the next three to five years. They also expect to cut costs across the company by about $113 million this year. That will more than offset integration costs, resulting in an overall cost savings of about $13 million to $26 million.
Reebok expects only “modest” revenue growth of mid-single-digit percentages in the near-term with growth accelerating towards the end of the three to five year period. This year alone, Reebok aims to open 90 stores in Russia and 200 in China. Longer term, Reebok is planning about 3,200 stores in China, India and Russia by 2010 as well as other expansion plans in Turkey, Poland and other parts of eastern Europe.
Currently, 40% of Reebok's sales come from North America and 40% from Europe, with the rest from the rest of the world. The company feels that this ratio will change so that the rest of the world would represent a bigger part of overall sales.One way to do this will be to take over third party distribution agreements and go direct to countries like Brazil, Argentina, Switzerland and Spain. Management said the company is working to buy out those contracts, but that some may have to run their course through 2012.
