Following the verdict announced by Jodhpur Court on the 1998 blackbuck case, where actor Salman Khan was sentenced for five years, the shares of apparel company, Mandhana Retail Ventures witnessed a highly unpredictable day at the stock market on April 5.
In a major setback, Shares of Mandhana Retail Ventures fell as much as 15 per cent from day’s high of Rs. 132.25. It fell to Rs. 111.40 at day’s low before closing at Rs. 114.90, before trading flat at Rs 115.70 during late afternoon trade on Thursday on the Bombay Stock Exchange (BSE). Unusually high-trading volume was observed in the shares of Mandhana Retail, as at 12:35 pm, more than 2 lakh shares exchanged hands on both NSE and BSE with about 1.95 lakh on NSE alone. The share of Mandhana Retail Ventures ended the day’s trading at Rs 116.
Mandhana Retail has licensing agreement with the actor’s Being Human Foundation to design, manufacture, retail and distribute clothing lines under “Being Human” trademark.
Mandhana entered into the agreement with ‘Being Human’ on December 23, 2010 effective from January 1, 2011.
A Jodhpur-based trial court convicted Salman Khan in the 1998 blackbuck case. However, in the aforementioned case, other accused celebrities Saif Ali Khan, Tabu, Sonali Bendre and Neelam were acquitted by the same court on Thursday.
Salman was found guilty of killing black bucks in Kankani village near Jodhpur on the night of 1 October, 1998, during the shooting of the film Hum Saath Saath Hain.
The actor was booked under Section 51 of the Wildlife (Protection) Act, 1972 by the court and has been sentenced to five years in prison with a fine of Rs 10,000.
The special verdict was delivered by Chief Judicial Magistrate Dev Kumar Khatri. The court had reserved its judgment on 28 March after the hearing of the final arguments.
In a major twist, District and Sessions Court Judge Ravindra Kumar Joshi reserved the judgement on the actor’s bail plea hearing till Saturday.
Can ‘Blackbuck’ dethrone our ‘Sultan’ of Bollywood?
With the verdict, Khan’s projects including shows, movies and endorsements, hangs in despair.
Khan is slated to star in four major films over the next two years — Race 3, Dabangg 3, Kick 2 and Bharat. While the last three are in pre-production stages, Race 3 is in production stage in the UAE. Race 3, alongside Jacqueline Fernandez is slated for an Eid release this year.
According to trade analysts, over Rs 4-5 billion have been hanging on these big-budget movies, which might be affected by the court’s verdict.
Khan has given of Bollywood’s most successful films – be it Sultan, Dabangg, or Ek Tha Tiger. The latest Tiger Zinda Hai (2017) with co-star Katrina Kaif had made Rs 3.39 billion in India.
A trade analyst told Business Standard, “It is too early to say if the projects will be shelved or whether Salman (Khan) will be replaced with another actor. If he gets bail and is allowed to finish the immediate projects, then at least Race 3 will release on the announced date.”
Besides, Khan also anchors Colors’s popular reality show Bigg Boss. He is also expected to return to Sony as host as this year the channel plans to revive the game show Dus Ka Dum.
Khan is among the highest-paid anchors in the country, with estimates pegging his earnings per episode from Bigg Boss last year at Rs 60 million.
He is also one of the most sought-after celebrity endorsers in the country. The actor also endorses brands such as Thums Up, Yatra.com, soap detergent Wheel, Britannia’ s Tiger biscuits, Ranbaxy’ s Revital, Rotomac Pen and SF Sonic Batteries, Astral Poly Technik and CP PLUS.
Recently, Khan becomes the new face of the brand Appy Fizz. The beverage company Parle Agro has announced Bollywood actor Salman Khan as the new ambassador of its brand Appy Fizz as it aims to further strengthen the brands connect with millions of consumers across India.
Replacing Priyanka Chopra, Khan is reportedly to feature in the new #FeelTheFizz campaign for the soft-drink brand.
Khan’s estimated annual endorsement fees are estimated between Rs 120-150 million per year per brand.
Despite having a downfall at the Box-Office for Tubelight, Khan bagged the top spot in the Forbes 100 Celebrity list last year again.
The 52-year-old actor earned Rs 2.33 billion, backed by endorsements of several consumer-facing brands. In fact, his earnings constituted 8.67 percent of the total earnings, Rs 26.83 billion of the top 100 celebrities for the year, several media reports suggest.
Now, with the current judgment, it is to be seen whether Salman is able to match steps with other Khans or not.
Can ‘Being Human’ escape the brunt of the verdict?
On Thursday, Mandhana got the biggest shock of the life, when the shares fell as much as 15 per cent from day’s high of Rs 132.25.
Being Human was launched by Salman Khan in 2012 and was globally licensed by The Mandhana Retail Ventures. It has footprint in over 15 countries with over 600 points of sale.
Earlier in 2016, Mandhana Industries Ltd and The Salman Khan Foundation terminated the brand license agreement and entered into a global trademark license agreement up until 31 March 2020.
Mandhana is focused on creating an asset light business model and faster penetration in tier 2 and tier 3 cities, the company said in a December quarter presentation.
The Being Human Clothing store is spread across 1,322 square foot in the newly opened outlet Palladium Mall at Velacherry, PTI reported.
The company has exclusive stores in 45 cities across the country and also retailed through shop-in-shops, distributor networks and web portals.
“The development will not have any significant impact on the stock. The markets are already discounting this, as the case has been going on since the last 20 years. The company’s financials and/or image will not be impacted due to the conviction. That said, there has not been much growth in the company in the last nine months. Sales during the nine-months ended December 2017 have been stagnating as compared to the previous corresponding period. Even the profits have dipped around 50% year-on-year. The fall the stock is merely a knee-jerk reaction,” G Chokkalingam, founder and managing director of Equinomics Research was quoted as saying from the Business Standard.
It is to be seen whether it regain its status on the bourses again, or remains flat.
Should brands split itself from tarnished celebrities?
Positive association leads to exponential gains, whereas, negative associations can erode market value in no time.
Recently, after the ball-tampering scandal by Steve Smith in Australian cricket, a Reuters report said that the Australian cricket team lost a major sponsor and a host of large companies tore up branding deals with individual players.
Fund manager Magellan Financial Group cancelled its team naming rights deal, while Commonwealth Bank of Australia dropped players caught in the scandal. Footwear and sports equipment brand ASICS, too, terminated its sponsorship contract with David Warner and Cameron Bancroft immediately.
After ASICS, breakfast cereal brand Weet-Bix also dropped Steve Smith.
In the event of some issues involving a celebrity, fame can very quickly transform into notoriety and a positive image into a negative one. Since, a brand ambassador reflects his influence and persona in the product.
Some experts feel that a brand must disassociate itself from the ambassador engulfed in a controversy to maintain the brand value of the product.
“There are many such instances in India, he feels, where the celebrity’s popularity and fan following has remained almost undiminished despite controversies and proven misconduct, if not crime. Some notable examples are Azharuddin and Ajay Jadeja in cricket or Salman Khan and Sanjay Dutt in cinema, not to mention scores of politicians,” Samit Sinha, managing partner, Alchemist Brand Consulting was quoted as saying from the India licensing Post.
Now, with all these controversies, it will be interesting to watch whether Khan remains the Dabangg of Bollywood or will it be a complete downfall for the superstar. Only time will tell!
[…] had always led the entrepreneurship bandwagon with his ‘Being Human’ collection, which includes tees, shirts, trousers and many more. Salman Khan his first ‘Being […]