Puma to tap into women’s wear for growth

Abhishek Law Kolkata | Updated on January 10, 2018

To align prices of online and offline offerings

German sportswear-major Puma is looking at the women’s wear segment for growth. Nearly a third of its sales are expected from the category soon.

“We see good growth in the women’s wear category. We expect the segment to cross 30 per cent of our business by next year,” Abhishek Ganguly, Managing Director, Puma India told BusinessLine.

Currently, women’s wear accounts for 28 per cent. The company will look at women’s only shop-in-shop formats from 2018 onwards. Standalone stores are not an immediate focus.

Total sales too, is likely to see a 20 per cent increase with apparels being a major growth driver.

For Puma, 55 per cent of its turnover is from footwear; while another 35 per cent is from apparels.

Pricing model

The remaining 10 per cent comes from accessories. “This is a very healthy mix to have, for a sports brand,” he said.

In fact, Puma will be looking to balance its portfolio between e-commerce platforms and the physical stores and is also working on ways to align prices between online and offline offerings.

For example, new launches and various other models are priced uniformly across both channels.

The need arose after a section of the customers, who moved away from offline, started looking for similar offerings online.

“Earlier, we would not give these offerings online. But the scenario is different now,” Ganguly points out adding that discounts across e-commerce platforms have gone down, with these players now focussing on profitability. And Puma, accordingly, has worked on its pricing strategy.

For instance, Puma’s online range — which is sold to marketplace players at a wholesale rate — has lesser or no price control by the company. But when the inventory belongs to the company, it maintains uniform pricing across channels.

“When we are listing products from our warehouse, which we are also selling at brick-and-mortar stores, then we control the price,” he said.

The sportswear-maker claims to be the leading brand in its category here in India, in terms of turnover, and, competes with the likes of Adidas, Nike, Reebok and others. Its India operations turned profitable in 2009, and, since then it has written-off the accumulated losses.

India strategy

Puma India (Puma Sports and Puma Retail) reported a sales of ₹921.30 crore in 2016 (it follows the calendar year for accounting purposes) and a profit of ₹43 crore. According to Ganguly, one of the reasons why the sports wear-maker has been successful in the country is because of its cautious store expansion and the focus on tier-II towns.

Most of the new stores are targeting tier-II towns as against the strategy five years ago when it was focussing on major cities like Delhi, Mumbai and Bengaluru.

“Some of our best stores are in cities like Nagpur, Nashik and Bhopal. We are not restricted to metros,” he said.

“Our expansion into smaller cities has yielded results. Hence, we are looking at alternatives not just in metros but also in tier-II and sometimes tier-III cities,” Ganguly added.

Puma had 360-odd stores and a presence in 115 cities. Of these stores, 60 were company-owned.

Published on September 04, 2017

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