FAM breaches Puma contract

Football Association of Malawi (FAM) has conceded that it is in breach of contract with Puma having failed to meet a July deadline to order another consignment of the replica jerseys.

FAM had hoped to sell half of the 10 700 initial consignment by July so that it could order another lot as per agreement with the giant sportswear manufacturer.

However, the association’s president Walter Nyamilandu said they could not order another consignment as they still have old stock.

“If we go by the contract [that we signed with Puma], then we are in breach, but our position is that the quantities that were discussed were not realistic and there is need to renegotiate,” said Nyamilandu.

Asked if there are likely to be repercussions following the breach, Nyamilandu said: “There could be repercussions, but the worst scenario would be termination of the contract. However, the contract is still on and we are in touch with Puma. We hope they will understand the reasons we have given them.”

He also said as of now there is no need to press the panic button as FAM paid Puma all its dues for the initial consignment.

“The drawback is that we have not received complementary items for the national teams due to our failure to finish selling the first consignment. So, Puma have lost nothing,” he said.

On whether the association carried out an a research before venturing into the business, Nyamilandu said: “When we went into the business, we responded to the need [for replica jerseys]. The fans wanted to be identified with their team.

“But, perhaps, we overestimated the demand. The thinking was that we would do it on a trial-basis for a year. We have, however, been impressed with those that have bought the replica jerseys. The market is there, but not as huge as we anticipated.”

However, Nyamilandu could not say how many replicas have been sold so far. He referred Weekend Nation to the association’s commercial manager Casper Jangale who said needed more time to reconcile the figures.

But Jangale claimed that the sales had picked up since the price was reduced from K9 000 ($30) to K5 000 (about $16).

“There has been notable improvement in the sales since the reduction of the price,” he said.

He dismissed suggestions that the development is clear testimony that the business venture was a flop.

“One thing that people need to understand is that it was the first time for us to venture into such kind of business and we were bound to encounter challenges,” said Jangale.

He claimed that according to a recent market analysis, the class of people that wanted the replicas were mostly lower class who cannot afford the price.

“It is not that we did not offer a suitable product, but our market is mostly the lower class who can hardly afford. Unfortunately, other brands ascertain the quality according to the class of people,” he said.

However, veteran soccer commentator and marketer Moses Dossi said the development was proof that FAM did not conduct a proper research before venturing into the business.

FAM had hoped to clear half of the consignment by June when the Flames faced Nigeria and Chad in 2014 World Cup and 2013 Africa Cup of Nations qualifiers.

According to the contract, FAM is supposed to order at least one consignment every year.

During the launch of the replicas in September last year, Nyamilandu said as one way of maximising the sales, they planned to order two or three consignments a year. He also said FAM had an opportunity to periodically introduce a new design to refresh and excite the market.