Puma terminates deal with FAM

It’s over. Giant sportswear manufacturer Puma has terminated the contract with Football Association of Malawi (FAM) due to non-performance in the sale of replica jerseys.

FAM president Walter Nyamilandu on Wednesday confirmed that the two parties recently agreed to a mutual termination of the contract, which had two years to run, and that discussions with another potential partner are already at an advanced stage.

“Yes, I can confirm that the deal was cancelled due to non-performance on our part. The requirement was to sell the [10 000 units] stocks after a year, but it took us a period of about three years to complete the initial stock.

“We also couldn’t pay for the replicas due to financial constraints,” said Nyamilandu.

He also said the target is to have another technical partner by the time the 2015 Africa Cup of Nations’ qualifiers’ roll into life.

Nyamilandu said the development means the Flames are not obliged to wear Puma branded kits.

“But we can still wear the Puma kit if we want to, but with no strings attached,” he said.

The FAM president also conceded they did not carry out a thorough research prior to making a commitment.

“We overestimated the market and our distribution channels weren’t clear-cut. The other challenge was our debt collection system. So, these are the lessons learnt from the exercise,” he said.

However, the FAM boss said despite failing to make the grade, the business venture was worthwhile in that they were able to fund some activities using proceeds from the sale of replicas.

“We sent the national team to Botswana for an international friendly. The recent talent identification exercise was also from the same venture and we plan to supplement the Under-20 national team CAF Youth Championship preliminary qualifiers [against Botswana] from the same proceeds,” said Nyamilandu.

However, the FAM head said despite the obstacles, FAM did not incur a loss from the business.

“We actually managed to recover the capital and barely managed to break even. There was a minimal profit compared to what we had anticipated and that means we still have money to reinvest.

“So, we are determined to carry on with the business and hopefully by next month, we should announce a new partner,” he said.

However, Nyamilandu claimed that he did not have the actual figure which was invested, but according to The Nation findings, it was in the excess of K60 million—a K36 million direct investment and K30 million that was sourced to pay Malawi Revenue Authority.

FAM signed a five-year deal with Puma in 2010 which was expected to run until 2015.

Due to poor sales as most people could not afford the initial K9 000 (about $22) price tag, the association reduced the price to K5 000 (about $12.50). The development that was also necessitated by the devaluation of the kwacha.