Puma plans to buy out partner’s stake

Puma Sports India, which recently got the government’s approval for bringing in FDI, is planning to buy out its partner Knowledge Fire’s 49 per cent stake in joint venture Puma India Retail, and to launch own stores in the country.

Also on the cards is making India a manufacturing hub for the company’s products, said Abhishek Ganguly, Managing Director, Puma Sports India.

Puma had proposed to bring in ₹10.1-crore ($1.66-million) FDI, which the Foreign Investment Promotion Board approved late last year.

Currently, Puma has two companies in India — Puma Sports India (the holding company) and Puma India Retail, a 51:49 joint venture with Knowledge Fire. It is operating in the country through the single brand retail route.

“We have got FDI approval and will push for more footwear manufacturing in India, from the current 40 per cent to 60 per cent Made in India products,” said Ganguly.

“Our joint venture will also get dissolved as we are considering buying out the local partner’s 49 per cent stake and there will be greater involvement in retail. India is going to be a market of focus for Puma.”

Puma currently has 340 stores, of which about 230 are owned by smaller franchises and the rest by Knowledge Fire.

“We will continue having franchise-led stores for smaller markets, while our company-owned stores will be for the larger and more expensive real estate markets as we do not want to disturb the balance with our franchises,” added Ganguly.

Besides, India is also expected to emerge as a manufacturing hub for the sportswear company as it expects to shift its dependence on China for sourcing footwear.

“Almost 80 per cent of global sportswear manufacturing happens in China and we are now looking at an alternative destination. India could become a hub for the global market as manufacturing in China should get balanced,” he added.

However, with FDI being approved, Puma is planning to increase its number of stores and also enhance sub-contracted manufacturing, creating more employment opportunities. The company plans to invest about ₹1.5 crore for each new store it plans to open measuring about 2,000 sq ft.

Focusing on areas like running and woman’s fitness, Puma has recently roped in Lisa Haydon to endorse its new footwear brand – Ignite.

Puma was one of the last entrants to enter India in 2005 after Reebok, Adidas and Nike in the sports footwear segment. However, both Nike and Reebok have yet to get FDI approval to sell through their own stores and are currently engaging in the wholesale cash & carry route to do business in India.

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