Puma will place more emphasis on sports in Romania after taking over the distribution in the country next Jan. 1. Investments in sports marketing are also planned in Bulgaria, where Puma is apparently set to raise its stake in a joint venture with its Greek distributor, Glou, from 75 to 100 percent. It has already set up its own company in Croatia.
Puma already sponsors the Bulgarian national football team, but it has no relevant sports marketing action in Romania where the national team, sponsored by Adidas, was recently qualified to compete in the Euro 2008 football championship. The Wildcat will look at sports marketing opportunities in team sports and running, among other sports.
Puma’s current Romanian distributor, Mexxem, tried to market Puma as a sports brand when it took it on in 1999, but it began to generate sales only after its started to market it as a purely lifestyle brand, investing into single-brand stores and associating Puma with music bands, music events and MTV. It was probably too early then to introduce a new sports brand in a market dominated by Adidas, although Nike’s distributor in Romania, Elmec Sport, has been more successful.
A Dutch-based trading company with a dwindling shoe manufacturing base in Romania, Mexxem has decided to develop strongly in the booming Romanian retail sector. In 1995 it opened at Targu Mures Puma’s second concept store in the world, after its first trial at Santa Monica, and subsequently added four other Puma stores in the country. With sales of nearly €12 million, Puma will represent this year about one-half of Mexxem’s total revenues in Romania, but the loss of the distribution contract will be made up through the development of two chains of multi-brand stores and through contracts with other sports and casual brands.
Mexxem has already started to close down gradually all its Puma stores, but it will set up instead dedicated Puma shop-in-shops in some of its multi-brand shops, which it runs under the Stone Creek and Freezone banners. It has a total of 19 Stone Creek stores and 5 Freezone shops, plus 8 outlet stores, and it is aiming to raise their total number to 70 units by 2010.
These stores, one of which has already replaced a former Puma shop, currently sells many of the other brands for which Mexxem has the exclusive distribution in Romania such as Crocs, Dr. Martens, Lee, Wrangler, Pepe Jeans, Rocket Dog, Royal Elastics, New Era, Baby Phat, Reef, Dickies, Dakine, Merrell, Patagonia footwear, Keen, Circa and Vision Street Wear. New contracts with Le Coq Sportif, Royal Elastics and Dakine will become effective with the Spring/Summer 2008 collections. The company is considering setting up single-brand shops for Le Coq and Merrell.
For its part, Puma will open next January a showroom of more than 300 square meters in Bucharest, followed by a new single-brand store in Constanta, the country’s second-largest city. The brand plans to open at least five other new stores of 150-200 sqm. at key locations by 2010.
Puma Romania is starting off with a staff of about 15 persons. None of Mexxem’s top officials are migrating to Puma Romania, which will be run by Dan Crisan, an executive who is coming from the tobacco industry. He will be assisted by a new sales manager, Tiberiu Tuluca, who comes from Adidas Romania (more in a new extensive market research report by SGI Europe on all the Balkan countries due to come out in January).
