Columbus Shoes, an Indian company that makes and sells footwear under its own brand name, has obtained a sub-license to make and sell footwear under the Italian brand to independent Indian shoe stores. Sports Lifestyle, Lotto's master licensee in India, will continue to source Lotto footwear for sale to key accounts and to directly operated points of sale.
The deal is meant to free up Sports Lifestyle's resources to invest more in mono-brand stores and marketing. Lotto already has 50 mono-brand stores in India but aims to have 250 by the end of 2015. Furthermore, it has about 150 shop-in-shops in department stores and other key accounts. On the marketing side, Sports Lifestyle has just invested in an endorsement deal with Kochi Cricket, one of the franchise teams in the Indian Premier League (IPL).
Owned by Sandeep Manocha, Columbus is a shoe manufacturer with plants in India and China that have a joint capacity of about 2.5 million pairs per year. For the Columbus brand, the company has built up a network of about 10,000 independent shoe retailers, serviced either directly or through wholesalers.
About 2,000 of these stores would be suitable for Lotto, whereas the brand is sold in only about 500 independent stores so far. The target is to reach 1,500 stores in one year. For the time being, about half of Lotto's sales in India go through independent stores, and that share should remain stable as Sports Lifestyle will also continue to roll out directly operated points of sale.
The deal with Lotto will enable Columbus to approach its independent retail customers with a complementary offering: Its own Columbus footwear retails at an average of about 1,500 rupees (€23.25-$32.90), per pair compared with prices of about 2,000 rupees (€31-$43.90) for Lotto (excluding flipflops and sandals) in the wholesale channel, and about 2,600 rupees (€40.30-$57) in its own stores and corners.
Lotto is one of the sports brands that are targeting the Indian sports market with a strong commitment. Its strategy is extensively profiled in the unprecedented and highly insightful Indian sports market report compiled by EDM Publications for the British Federation of Sports and Play Associations.