Reebok India will officially launch its new ‘Fit Hub’ line of stores on Tuesday. These stores will provide a range of services on fitness counselling and offer advice on purchase decisions, aimed at improving the store contact and feedback from consumers.
“Fit Hub store staff will undergo intensive training and the stores will have certified trainers during peak hours to advise customers on fitness regimes, and will help them choose products suited to their specific training schedule, said Erick Haskell, MD, Adidas India. Adidas is the parent company of Reebok.
The company is going for a major re-position of their marketing strategy and will embark on a marketing campaign to regain its market presence in India.
Following the Rs 800-crore scam in 2012, Haskell has instituted the new strategy aimed at re-targeting Reebok’s customer base and giving it a more complementary role with respect to Adidas stores.
With Adidas dedicated to providing accessories for vertical sports such as cricket or soccer, Reebok will focus on providing fitness products such as running shoes or yoga apparel. The two brands are being re-positioned to provide a more complementary rather than competitive product line.
The company also underwent a business restructuring where it moved from a minimum guarantee model to a cash-and-carry business. The Indian franchisees were largely operating under the minimum guarantee scheme under which they got a minimum amount from the company, irrespective of sales. The new model is based on flat margins of 35 per cent on store sales.
The re-positioning and new business model had initially been resisted by franchisees, which resulted in one-third of the franchisees not going forward with the new scheme.
Now, with the franchisee conflict settled, Reebok plans to expand its footprint. With 50 new stores set to open by the year end and 100 Fit Hub stores by early 2014, it will focus on the metros and lower tier cities. The company will eventually overhaul all its stores, with Fit Hub becoming the basic store model in the future.