German sportswear maker Puma has reported losses in its India operations. The company records filed with the Registrar of Companies show a loss of Rs 3.6 crore in 2016.
The company has signed Team India captain Virat Kohli in February this year to endorse the brand for eight-years, which in all likelihood will cover almost entire remaining career of the cricketing icon.
The company has reported a loss of Rs 3.6 crore and sales of Rs 921.2 crore for January-December 2016. The decline is continuous for the company that has seen its profits go down from Rs 29 crore in 2014 to Rs 12 crore in 2015. The company, that signed Virat Kohli as brand ambassador for a record Rs 110 crore deal, has optimistic plans for the revival of its India business. “We have made investments in technology worth Rs 120 crore. We are building Puma.com to sell directly to customers,” Times of India has reported a senior executive of Puma India, who did not wish to be quoted, as saying. “Sales on online marketplaces are slowing down.”
Around 18% of Puma India’s sales take place online. Last year, it got the government nod for a 100% single-brand entity in India, for a wide range of retail options, including e-commerce.
Many industry experts that TOI spoke to said demonetisation and slowing online sales caught up with most lifestyle brands. “Last year has been tough,” said a top industry executive. “Business had just started to pick up during the second half of the year and then demonetisation struck. Second part of the year is when sportswear firms do around 60% of their business.”
Among international sports brands, Adidas has recorded profits from India market, while Nike has registered loss almost 50 times higher than Puma. Nike and Adidas have, however, been consolidating their businesses in India. Nike has shut around 35% of its stores in India. It also did not renew its bat sticker endorsement deals with cricketers, while Adidas too did not renew its deal with Kohli .