Real Estate Prices hit Adidas India Plans

Expansion plans of footwear and apparel major Adidas India has been hit by high real estate prices ruling in the country, a company official said.
Adidas India Marketing Private Ltd’s Managing director Andreas Gellner told reporters, “Rise in real estate prices has been affecting our growth plans in India”.
The company’s was planning to increase the number of retail stores from 325 at present to 450 by the end of 2008. It operates the stores through franchisee route.
Talking about real estate prices, he said that the prevailing rentals were not realistic. Typically, the flats rentals should be around 15-17 per cent of turnover per square feet.
However, the rentals at the moment were more than 20 per cent per square feet. In some cases it was around 40 per cent per square feet, he said.
Gellner said Adidas was not keen to spend that high an amount since the brand was not new to India. “We are in India for the last 13 years.”