Sep 22, 2016
Nike shuts stores in India to cut losses
Sep 22, 2016
Nike, the world's largest sportswear maker, has shut around 35% of its stores in India to combat recurring losses, according to a report by Times of India. It is left with around 200 stores in the country.
The loss fractions have only grown over the years for the brand, making it difficult to sustain in the country. In 2014-15, Nike's accumulated losses were around Rs 541 crore ($82 million), according to data filed with the Registrar of Companies (RoC).
Even companies like Adidas reveal accumulated losses of around Rs 68 crore and Reebok an accumulated Rs 2,198 crore losses for the same period. While German sportswear maker Puma reveal accumulated profits of around Rs 47 crore for the year-ended December 2015.
Nike's largest partner in the country is SSIPL (formerly Moja Shoes), which operates 80% of its stores, followed by Ravi Jaipuria's RJ Corp. Many Nike stores that have been recently closed have been converted into multi-brand stores by its partners and are showing encouraging results.
Nike is also planning to reduce the number of its partners in the country and will be working with just three or four to run its operations in India. The brand's investment plans have not worked too well over the years, and precisely that has led to the brand's problems and have therefore given way to the shutting of a bigger fraction of business in India.
Rs 1 crore = 10,000,000 Indian rupees (INR) = $151,000 (approx.)
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