Nike closes 35% stores in India to evade further losses

US sportswear maker Nike is only left with around 200 stores at present.
Nike to shut its stores

No doubt, India is getting fitness conscious with every passing day; it has surely spilled the beans for sports apparel brands in the country. With fiery instinct and aggressive competition among the brands, existence in the market has become a huge challenge. It seems like US sportswear maker Nike has not been able to persuade more people to buy its products in India.

With an aim to cut losses, one of the world’s largest sportswear maker, known for its premium shoes and apparel, has shut around 35% of its stores in the country. What Nike has left with is around 200 stores at present, said people familiar with the development.

According to the data with Registrar of Companies (RoC), in 2014-15, Nike's accumulated losses were around Rs 541 crore. Its sales and loss in 2014-15 were around Rs 803 crore and Rs 101 crore respectively. In comparison, rival Adidas' accumulated losses were around Rs 68 crore and Reebok's Rs 2,198 crore for the same period. German sportswear maker Puma, which follows a calendar year, showed accumulated profits of around Rs 47 crore for the year-ended December 2015.

According to a senior industry executive, as part of Nike’s strategy, it is reducing its number of partners in India and will be working with just three or four to run its operations. It has also been learnt that Nike is rethinking its strategy of sponsoring bats of top Indian cricketers. Although Nike spends around Rs 60 crore per year to sponsor the Indian cricket team's kit, sponsoring bats of cricketers such as Axar Patel, Ajinkya Rahane, R Ashwin, Ravindra Jadeja among many others, is an added cost. Companies spend anywhere between Rs 25 lakh and Rs 8 crore to sponsor a player's bat.

Nike's largest partner in the country is SSIPL (formerly Moja Shoes), which runs 80% of its stores, followed by Ravi Jaipuria's RJ Corp. Many Nike stores that have been closed recently have been converted into multi-brand stores by its partners and are showing encouraging results.

Publish Date
Not Sponsored
Live: People Reading Now
RECOMMENDED FOR YOU
TRENDING ARTICLE