Cricketers lose their edge in brand endorsement stakes

The heat from the cricket endorsement pitch is cooling, with rates falling between 25 and 50 per cent as advertisers shy away from new deals.Industry sources say the only major cricketer to have signed on for a new brand in the last six months is Yuvraj Singh.

Up-and-coming players like Gautam Gambhir, Rohit Sharma and Suresh Raina are charging Rs 40 lakh to Rs 60 lakh but have not signed any new individual deals in the last few months.

The exceptions, of course, are Sachin Tendulkar (who charges Rs 4.5 crore ) and Mahendra Singh Dhoni (Rs 3.5 crore) who still command a premium and are on a par with film stars.

Sports management companies agree that cricketers are losing their attraction for advertisers. "A player is hot for a season but all it takes is two non-performing series and the negative baggage comes along. I reckon that by 2012, cricket endorsement in India will come down to 5 to 7 per cent of the total endorsements, from the current 20 to 25 per cent,” says Anirban Das Blah, managing director, KWAN, a sports management company.

If cricketers are losing value in the advertising stakes, the sport is not. In fact, companies say it's the Indian Premier League (IPL) Twenty20 tournament that has turned the endorsement business upside down.

Also, with cricketers playing virtually throughout the year, non-availability is becoming another issue. “A cricketer has to spare five to eight days for a brand endorsement. If he signs for 10 brands, that’s 50 to 80 days. Who has the time with so many back-to-back tournaments? As a result, cricketers are quoting a high price but companies are not renewing contracts,” says Sonu Lakhwani, VP, Percept Talent Management.

Auto sales zoom in Oct

According to the Society of Indian Automobile Manufacturers (Siam), this was a continuation of the double-digit sales growth posted by the industry since April this year. The only exception was the month of September, when overall sales growth slowed to 7.67 per cent.

A big surge in the sales of passenger cars and medium and heavy commercial vehicles (M&HCVs) raised domestic vehicle sales in October to 1,000,760 units — 15.62 per cent higher than the 865,566 units sold in the same month last year.October’s healthy sales growth for the overall automobile industry came on the back of record double-digit growth of 33 per cent for passenger cars and 11 per cent in the sales of two-wheelers.

A positive sales growth notched up by the M&HCV segment (large trucks in the goods carrier segment) for the third continuous month also helped the industry. This segment, which posted a positive growth of 1 and 3 per cent in August and September respectively this year, grew by a whopping 64.14 per cent in October after the industry sold a record 16,048 vehicles last month.Domestic sales of cars and utility vehicles for October grew 33 per cent, after the industry sold 168,043 units — the highest sales figure posted since this April. This is also a continuation of the double digit-growth posted by car manufacturers since July.

AI pays a month's incentives to staff

Faced with a strike threat by its pilots, Air India today paid a month's incentives and allowances to its 30,000 employees as it prepares for a crucial meeting of its board tomorrow to decide on major cost-cutting initiatives.

The board, which would meet in Chennai, is likely to take a decision on a proposal to scrap the productivity-linked incentives (PLI) paid to its top managerial cadre, and adopt the financial accounts for 2008-09.

"The main agenda is adoption of accounts for the previous financial year," sources close to the development said. The board is also likely to discuss route and capacity rationalisation as part of the cost-cutting proposals.However, the pilots, who have warned of a strike from November 24 if their demands are not met by November 20, seem to be in no mood to relent.

While the original strike notice given by the non-executive pilots is effective from today, the management was asked by agitating pilots, at a meeting with the Central Labour Commissioner here yesterday, to decide on their demands by November 20 to avoid the strike. The board meeting comes days ahead of a meeting of the Group of Ministers on the national carrier's financial health.

PNB, Axis cut retail loan rates

At a time when the Reserve Bank of India (RBI) has signalled withdrawal of the easy monetary policy, two large banks have cut interest rates for retail loans.

The country’s second-largest public sector lender, Punjab National Bank, slashed the interest rate on auto loans by 50 basis points (BPS) and announced a waiver of processing and documentation fees.Private sector lender Axis Bank announced a special home loan scheme under which the interest rate for the first year will be 8.0 per cent. There will be floating rate for the remaining tenure.The offer is open till December 10. The bank has also extended the maximum repayment period for its standard home loan period to 25 years.

Another New Delhi-based state-owned bank, Punjab & Sind Bank (PSB), has slashed interest rates on agriculture loans by 2 per cent to help farmers in the rabi season. The peak-level rate of 13.5 per cent has been brought down to 11.5 per cent per annum.The National Bank for Agriculture and Rural Development (Nabard) has reduced interest rates on refinance for investment credit by 50 basis points for lending by various rural financial institutions. For commercial banks, the rates will be 8 per cent.

Auto sales vroom 30% on festive spirit

Sales of cars and utility vehicles showed an upward trend again in October as the festive frenzy continued to drive consumers to showrooms, pushing retail sales and clearing the inventory stock pile of vehicles swiftly.

Market leader Maruti Suzuki and Hyundai Motors, which led the growth charts during October, stated that sales during the traditionally auspicious days around Diwali were the best ever in their history.

Softened lending rates and attractive benefits offered by companies pushed the aggregate sales of the industry to 154,476 units during the month, an increase of nearly 30 per cent over 120,050 units reported in the same month a year ago, according to company sales figures for last month.

Initial sales figures (from volume-generating companies like Maruti, Hyundai, Tata Motors and others) are even higher when compared with the preceding September month, when the industry had generated the best monthly sales in the year.

Retailers make a comeback from the margins of crisis

Powered by aggressive cost cutting and favourable terms from real estate developers, retailers have posted a healthy increase in operating profit margins (OPM).

Operating margin is the percentage of sales left after subtracting production, marketing and other expenses. A healthy operating margin is required for a company to be able to pay for its fixed costs such as interest on debt.

The growing margins suggest that the belt tightening is paying off. For example, the margins of Pantaloon Retail, the country's largest listed retailer, have gone up from 9.2 per cent in June last year to 10.6 per cent in June 2009 (the latest numbers available). Others such as the Raheja-owned Shoppers Stop and Tata Group's Trent, Reliance Retail and Spencer's Retail aren’t far behind.

Kishore Biyani, managing director of Pantaloon Retail says, "We are taking a number of steps to reduce costs in the areas such as office space, employee costs, rents and so on. Consumer sentiment has also picked up, and that helped.”

Pantaloon's employee costs have dropped 133 basis points and operating costs 178 basis points year-on-year after the company adopted tight cost control measures over the last one year. Pantaloon has also pared its expansion — compared with 2.8 million square feet of space it added in 2007-08, it added just 1.8 million sq ft in FY 2009.Retailers have also rationalised warehousing and logistics costs, consolidated real estate requirements. Hence, their costs did not go up as a percentage of sales and profitability improved.”

About Archies

Archies Limited (earlier called Archies Greetings and Gifts Ltd.) is an Indian company into the business of manufacturing and selling greeting cards and other social expression products like gifts and posters. Archies has a market share of about 50% of India's greeting cards market.

Archies has about 2000 outlets and franchisees, called Archies Galleries, spread across 120 cities and 6 countries.

Archies Greetings and Gifts Ltd., was set up in 1979 by Anil Moolchandani and initially it sold song books, posters and leather patches. The company's main product, greeting cards was introduced in 1980. Cards were introduced for major Indian festivals like Holi, Diwali and Rakhi, apart from the usual new year, birthday and anniversary occasions. The company went public in 1995. In 1998, it was listed on the National Stock Exchange of India and Bombay Stock Exchange.

Following the increasing popularity of e-cards , Archies started its online portal archiesonline.com in 2000. The company expanded its product range to include artificial jewellery, crystal ware, chocolates and perfumes, and accordingly changed its name to Archies Limited in 2002.