Puma Sports India, the local unit of Puma AG, the sports lifestyle retailer, today said it would be cautious in opening stores due to the economic slowdown and subdued consumer sentiment.
Puma India, which operates about 45 branded stores, aims to open more only if these are likely to break even in the first year of operations, according to a top company official. Puma AG, the German sporting goods company, is controlled by PPR SA, the French owner of the Gucci brand.
“Given the global scenario, we want to open stores which will become profitable in the first year of operation,’’ Rajiv Mehta, managing director, Puma Sports India, said. “Spend wisely is the motto.”
Puma AG, known for its leaping-cat logo, is adopting a cautious approach after scrapping the target of ¤4 billion (Rs 26,483 crore) revenue by 2010. The company’s fourth-quarter profit dropped 79 per cent to the equivalent of Rs 5,363 crore, the Herzogenaurach, Germany-based company, said on February 18.
So, Puma aimed to concentrate its expansion in Tier-II and Tier-III Indian cities, mainly in the western and northern regions, where demand was robust and the market largely untapped, Mehta said, without disclosing how many stores the company planned to open.