Nike shuts down 35% of its Indian stores to cut losses

Nike, the world’s biggest sportswear maker has shut down 35% of its stores in India so as to cut losses. Currently, there exists only 200 stores of the sportswear maker.

According to the data filed with the Registrar of Companies (Roc) in March 2015, Nike’s losses were around Rs 541 crore. Its losses for the current year were Rs 101 crore.

"As part of its strategy, Nike is reducing its number of partners in the country and will be working with just three or four to run its operations here, earlier it had around 20 partners and it has halved the number. Further consolidation will take place." a senior industry executive told ET.
Many of the stores closed by Nike have been converted into Multi-Brand stores by its partners like SSIPL and Ravi Jaipuria's RJ Corp. These multi-brand stores are showing encouraging results.

According to the sources, Nike has been thinking about its strategy of sponsoring bats for top Indian cricketers. Though, 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 and among many others is an added cost.

"Wrong marketing investments leading to poor return on investments has been a problem for Nike in India, the company's retail expansion strategy has also not worked according to plan, leading to closure of many stores," senior industry executives told ET.
(image:Reuters)