Biding Time Puma Still Waiting to Pounce

The long-struggling sportswear brand with the predatory black feline is making changes to increase its lifestyle appeal, but not expecting much growth this year.
Reviving Puma's roar. Björn Gulden, Puma's chief executive.

Björn Gulden knows the power of the personal touch. That’s why the Puma chief executive sometimes pays a visit to his biggest customers himself, including to Intersport, the German sports retailer and biggest in Europe.

The sports dealers who market the iconic German brand say that Mr. Gulden talks candidly about his company’s problems. While they admire him for this, they are still not placing huge orders, though it is safe to say the big cat logo is back on their radar screens.

For a good year and a half now Mr. Gulden, a Norwegian, has been running Puma, Europe’s second-largest producer of athletic shoes after Adidas, its larger German competitor. The two historic rivals, both based in the same tiny Bavarian town of Herzogenaurach, were born out of a split between two brothers in 1949.

Mr. Gulden has set out to take Puma back to its roots in sports. The retailer's new collection, which to some extent bears Mr. Gulden's imprint, will hit stores in the coming days.

But turning around an image takes time. Customers are still reaching for the competition’s shirts and shorts.

Nike, the world market leader, is growing strongly, while Puma’s sales stagnated last year at just under €3 billion ($3.43 billion).

Although its net earnings climbed from €5 million to €64 million in 2014, Puma used to be much more profitable. Ten years ago the company made almost €300 million in profits, despite €600 million less in sales.

Mr. Gulden doesn’t want to say when Puma will be as profitable again. “Give us time,” the manager said.

Puma first needs the right products – and Mr. Gulden has just now begun to develop them. The brand is not shining as brightly as it did in the last decade. It only places 10th among Intersport’s major suppliers. This puts the company behind even medium-sized companies like the outdoor outfitter Schöffel.

Puma has now become the kit sponsor of the English Premier League soccer club Arsenal and a shareholder in the German league club, Borussia Dortmund.

Although Puma is the fifth largest vendor at Intersport’s competitor, Sport 2000, two years ago it was number three. Sales at Sport 2000 again fell last year. The three market leaders, Adidas, Nike, and Asics, sold more in the chain’s stores.

Puma's lifestyle collections weren’t especially well received, said Sport 2000 business manager, Andreas Rudolf. But he sees the first signs that the company is making progress – its soccer shoe business increased by a fifth last year.

Mr. Gulden is convinced that if Puma can return to success on the soccer pitch, kids will want to wear the brand in their free time. “Sport is lifestyle,” stressed the corporate leader.

To that end, Puma has now become the kit sponsor of the English Premier League soccer club Arsenal and a shareholder in the German league club, Borussia Dortmund.

It has also engaged the singer Rihanna as creative director for a women's collection.

However, investors remain skeptical. Its stock price has fallen around 17 percent in the last year. The majority shareholder is Kering, the French luxury apparel and accessories company. On Monday this week, the shares stagnated in a weak environment at around €179 ($204.54).

Some cold comfort can be found by looking at its neighbor in the town of Herzogenaurach. Adidas lost over a fourth of its value on the stock market in the past twelve months.

Mr. Gulden also doesn’t promise a great leap in the current year. Sales should climb by around five percent. The profit margin is also supposed to increase, but he hasn't provided further details.


Joachim Hofer is a Handelsblatt correspondent in Munich. He specializes in the sports and leisure industry. To contact: [email protected]