Puma has presented a record result for 2022, with its highest-ever annual sales. With releasing its 2022 figures, the new CEO Arne Freundt appeared in front of the press for the first time at the annual press conference in Herzogenaurach. We bring you an insight into the very focused strategy that should lead Puma to even more growth in the years to come, including CEO Arne Freundt’s three clear levers for growth.
Arne Freundt appeared in front of the press as CEO as if it was all in a day’s business, opening Puma’s annual press conference in a relaxed manner. He was joined by another new addition to the Puma team, Maria Valdes: Puma’s chief product officer since the end of last year. In addition, CFO Hubert Hinterseher and the longest-serving management member Anne-Laure Descours, chief sourcing officer, led the conference.
“It was best sales, best Ebit, best net income, and we invested in our future. To sum it up, we are very happy,” said CFO Hinterseher after the final presentation of the key financial figures. And indeed, it was the most successful year in the company’s history, with revenues of €8,465 million (+24.4%) and an Ebit of €641 million. For the new CEO, this was not a “surprise, but the result of the momentum that Puma has” and, at the same time, no reason to stop. “We are hungry,” said Freundt, clarifying that Puma still has a lot planned for the next few years.
Puma and Freundt trust in a long-term strategy
Freundt established long-term growth and the associated strategy with his former boss and current Adidas CEO Bjørn Gulden. Now setting out his own renewed focus, he has identified three clear growth levers which he emphasizes: brand “heat,” the U.S. and China.
1. Elevation of the brand strength through distinction
First and foremost, for Freundt, a stronger positioning of the Puma brand is the basis for further growth. For him, it is fundamental that the distinction of Puma from its competitors is further expanded, the relevance of Puma further increased, and that the fun of sport and sports culture continues to be in the foreground (“it doesn’t have to be sweat, blood and tears all the time”) as well as recognizable.
“We see this power and potential already in a few categories (i.e., soccer, track and field) and areas (i.e., India and Latin America).” What can Puma do even better? “We need to be more effective in the marketing funnel.”
2. Qualitative growth in the USA
“Yes, we have got momentum in the U.S.,” says Freundt. “With our Basketball approach, we have a blueprint that is fully embedded in U.S. culture,” referring here to the successful entry of Puma into the basketball market four to five years ago.
Generally, Freundt adds: “We see successful growth in the U.S., but it was above all a quantitative growth. We did grow in the lower key of distribution.” Puma’s goal now must be to gain a foothold in the USA despite a difficult situation with extraordinarily full warehouses and a promotion-heavy environment. Freundt relies on higher-than-average selling prices, higher margins, and physical touchpoints with the consumer (in addition to digital storytelling). A flagship store in Las Vegas is already underway.
“We want to establish Puma as a premium sports brand [with]in the relevant set of U.S. consumers.” With regard to sports, the aim is to continue with success in basketball, soccer, and golf and increase market shares in the running sector. In addition, the strong presence in motorsport should be a driving force. According to Freundt, Puma benefits from the Formula 1 boom in the USA, as younger and increasingly female fans can be reached here.
3. China: “Market share is far from satisfying”
Business in China continues to be very difficult for Western brands. However, more opportunities are arising with the end of the Zero-Covid policy.
“I see the potential in the Chinese market, but our market share is far from being satisfying.” Freundt would not be drawn on exact growth or target figures, but he did refer to comparisons with Adidas and Nike. For example, on a global level, Adidas is about three times as big as Puma, and Nike five times as big. In the Chinese market, Puma’s competitors are much further ahead.
“There is no reason not to bring it to a global level in China as well. Also, here football, running and training will be the categories to build on,” and a strong brand has to be the foundation. To achieve this, Puma has a new flagship store in Wuhan and a local product team and wants to expand this team further.
Another focus should be to gain the attention of Chinese end consumers: “We have to re-engage excitement. And we need to invest more in our online journey. And therefore, we need to continue to invest in the team.”
Will this emphasis lead to even more growth? We don’t know yet, but under these renewed foci, any growth won’t be seen as the work of Freundt’s predecessor Gulden. It will be Freundt himself who is fully responsible.
