Puma moves out of joint venture, will now be on its own in India

After receiving nod for 100 per cent single-brand entity in India, German sportswear brand Puma has bought out the entire stake of local partner Knowledge Fire and converted their joint venture Puma India Retail into a fully-owned subsidiary. Puma has acquired 49 per cent stake of its partner. With this break up, Puma also gets a network of about three dozen company owned outlets.

Now, Puma Sports India will become the main entity that will carry out all the businesses of the German company. It will carry out retail, wholesale and e-commerce through the same entity.

In March, Puma and its rival Adidas had sought the government’s nod to undertake a wider mix of retailing options including wholesale, franchising, own stores and e-commerce through fully owned entities. By doing so they became the first foreign companies to take advantage of changes that allowed single-brand overseas retailers to sell online as well as in India. It was in November that the Department of Industrial Policy & Promotion eased norms to provide single-brand licence holders – FDI-funded companies allowed to sell products under a single label – multiple retailing options, including own stores, franchisees, wholesale retailing as well as e-commerce, under one entity.

This decision has helped other global companies such as Tommy Hilfiger and Furla. Last month, the former received approval for Tommy Hilfiger Arvind Fashion, a 50:50 joint venture between the US brand and Ahmedabad-based Arvind. This came after four years of applying for it.

Puma, originally a wholesale company that sold products to franchisees, has been in existence for last 10 years. During this time it sold Puma products through third-party retail.