Puma on a new track in India: Kidswear

It’s proving third time lucky for Puma, the German sports and lifestyle brand, in India. Despite being one of the first international players to have entered the country in the early 90s, Puma came into its own only in 2006 when it took charge of its manufacturing and also stepped up efforts to come up with its exclusive stores.

It is now ready with its line of kidswear as well, which it launched on Wednesday. “Kidswear, which has been there internationally, would complete the range for us in India. It would be a take-off on our adult range of apparel, footwear and accessories,” says Puma India Managing Director Rajiv Mehta.

But Puma's presence in India did require course corrections since the time it entered the market. While its tie-up with Carona fell through in 1998, its second foray in 2002 could not be sustained either. It had licensed Planet Sports to manufacture its apparel and accessories and distribute its footwear and eyewear. Observers say that in both the instances, quality became the bone of contention.

In 2006, the brand finally took the plunge and set up a subsidiary, Puma Sports India which wielded more control over local manufacturing and imports. “Despite spending less time in the market, we have been able to clock as much revenues as some older players. On a percentage basis, we are more profitable than many others,” asserts Mehta. Puma has already managed to increase the number of its exclusive stores from 45 in April to 64 by September.

Its latest diversification in a Rs 5,000 crore market that is growing at 15 per cent will be with a partner which knows the Indian kids market well. While Puma will keep production and imports under its control, the distribution will be through Giny and Jony. Mehta says Gini and Jony understands the kidswear business in India better than us.

But the biggest lesson that Puma will bank on is its partner’s pricing strategy. Says Mehta, “Kids outgrow their clothes and shoes fast. This is where pricing it right matters the most. With the right prices, parents would come back to your brand to replenish their child's wardrobe, rather than be discouraged by prohibitive pricing such as Rs 2,000 for a T-shirt.” Puma's range will feature mid- to premium products, priced from Rs 399 upwards.

Rajiv's confidence in Puma's partner is equally reciprocated. Giny and Jony Executive Director Anil Lakhani is looking forward to the variety that Puma's range will bring in its retail outlets, which he claims already brings in 30 per cent of the Rs 1,100 crore market for premium branded apparel.

But having been bitten twice, Puma is being shy. The brand would watch the performance of its kidswear for the next six months to one year before planning for the future. Lakhani, however, is more positive: “The target for us is Rs 40 crore in the first year following this tie-up.” Gini and Jony has set itself a turnover target of Rs 350 crore, up from Rs 280 crore last fiscal.

Puma has also kept a tight hold on how consumers experience the brand. Puma's exclusive stores might be run by franchisees, but it has put down guidelines for store executives who are Puma employees. “They are told that they are the CEOs of their stores,” says Mehta.