US sportswear giant Under Armour to appoint local distributor for India operations

US sportswear giant Under Armour is planning to appoint a local distributor to manage its India operations, instead of continuing with a fully owned subsidiary in the country, two people familiar with the matter said.

The development comes barely two years after the Baltimore-based company setting up its fully owned unit in India.

One of the people said the company is considering handing over the local distribution rights to a team led by Tushar Goculdas, the current managing director of Under Armour India.

Goculdas and Under Armour did not respond to an email seeking comment.

Under Armour made its India debut with an exclusive online deal with Amazon in 2017. Subsequently, in 2019, the world’s third largest sportswear company after Nike and Adidas set up its wholly owned India cash-and-carry business - where the country allows 100% overseas ownership. The company also appointed several local franchisees to operate Under Armour-branded outlets.

Franchisees currently operate 20 Under Armour outlets in the National Capital Region, Bengaluru, Chennai, Ahmedabad, Hyderabad, Lucknow and Chandigarh, among other cities.

Two US denim labels, Lee and Wrangler, had earlier this year decided to shut their fully owned India subsidiary. They have appointed Bengaluru-based omni-channel enabler Ace Turtle as the local distributor and master franchisee for the country. Ace Turtle is now planning to transform the Lee and Wrangler India businesses into omni-channel entities to drive growth and aims to double its sales here over the next two years by extensively focusing on online channels.

Companies are taking such steps as they are grappling with Covid-induced issues in their home markets, analysts said. Brands are exiting their subsidiaries in India to save money and to focus on or to rebuild in their bread-and-butter home markets, they said.

The pandemic has also led to a change of India partnerships for a host of global brands including Gap Inc, New Balance, Promod and Guess among other international labels.

Last year, blaming the pandemic, Gap and its India franchisee, Arvind Fashions, decided to call their alliance off, six years after the Bengaluru-based company signed a master franchisee for India.

Boston-based New Balance had late last year snapped its franchisee arrangement with Mumbai-based Major Brands, to sign up Gaurik Lifestyle as the new partner to run New Balance-branded physical outlets in India.