Reebok 2013 Annual Report Download - page 75

adidas Group
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2013 Annual Report
Group Management Report – Our Group
71
2013
Group Strategy
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02.3
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Intensify controlled space focus: We intend to increase the portion of
sales that comes from controlled space initiatives to over 50% of Group
sales in the coming years (2013: 48%). This includes new openings of
adidas and Reebok own-retail stores, the further extension of our
mono-branded franchise store base in markets such as China, as well
as new shop-in-shop initiatives with retail partners around the world.
In terms of our own retail, we intend to open at least 750 adidas and
Reebok stores between 2010 and 2015, as well as grow significantly our
eCommerce business, which we project to increase to € 500 million by
2015
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SEE GLOBAL SALES STRATEGY, P. 72.
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Leverage growth and operational scale through to bottom line: A
higher exposure to emerging markets as well as expanding controlled
space activities are important levers to improving brand presence,
increasing sell-through and driving higher Group profitability. In addition,
we continuously work on streamlining internal processes to accelerate
decision-making, reduce complexity and make our organisation leaner
and more efficient. At the beginning of 2011, we launched Driving Route
2015 to act as a key enabler to achieve these aspirations. The objectives
of Driving Route 2015 are very clear: speed, consistency and consumer
focus.
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Speed by implementing an organisation that allows faster
decision-making.
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Consistency by establishing a more aligned and efficient organisation
across functions and geographies.
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Consumer focus by reducing internal complexity, enabling us to put
more of our energy into what really matters – the consumer.
In addition, we have identified several profit levers across the Group to
support improvements in profitability. For example, we are targeting
improved product margins with initiatives such as range efficiency,
where we have the goal to achieve a 25% range reduction by 2015. In
wholesale, we are improving our business by sharpening our trade
terms policies and reducing our exposure to lower-quality channels of
distribution, focusing on higher-quality partners more aligned to where
our target consumer is shopping. On our mission to become a best-in-
class retailer, we continuously strive to improve the operating margin
in our Retail segment. In manufacturing, we are combatting inflation in
the supply chain by increasing our investments in automation and new
production techniques. Also, our investments in infrastructure such as
the new distribution centres near Osnabrueck/Germany and Chekhov/
Russia will ensure we increase capacity in a cost-efficient way to
service all of our channels, be it Wholesale, Retail or eCommerce
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SEE
GLOBAL OPERATIONS, P. 94. Finally, we continue to work on enhancing our
planning processes, to further improve profitability and working capital
efficiency
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SEE INTERNAL GROUP MANAGEMENT SYSTEM, P. 118. Therefore, we
believe there is significant potential to increase the Group’s operating
margin to 11% sustainably by 2015.
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Maintain financial flexibility: We strive over the long term to maintain
a ratio of net borrowings over EBITDA of less than two times. A strong
balance sheet increases our flexibility to realise value-generating
medium- and long-term opportunities in the best interests of our share-
holders as they arise.
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