The Puma brand regained some impetus last year, thanks in part to increased demand for its running and women's products. The uptick has encouraged the company to heighten its focus on the women's market this year, taking advantage of its partnership with Rihanna.
At Puma's annual press conference last week, Björn Gulden, the company's chief executive, was upbeat about the sell-through for the latest product ranges. They are aligned with the direction he advocated in the Forever Faster strategy after he assumed the group's leadership in July 2013.
Apart from a rise in sales of some classic sneakers, Puma enjoyed a 25 percent increase in sales of its running and training products last year. The sell-through was supported by cleaner design and the Ignite running footwear technology. Puma sold nearly 1 million pairs of Ignite shoes last year and is predicting sell-in of 2.5 million pairs this year. The demand has also been stimulated by more commercial models such as the Carson, for which about four million pairs have been ordered since the beginning of 2015
What Gulden may not have predicted two years ago is the resonance found by Puma in the women's market last year, aided by its partnership with Rihanna. Supported by advertising with the artist and the launch of her Creeper shoe, Puma's growth has been over-proportional in the women's category in the last months.
After the hit scored by the Creeper in stores and on social media in September, Rihanna was on stage at New York Fashion Week earlier this month to display the Fenty Puma by Rihanna range, which will hit the market in September. Beyond that, Rihanna is acting as the women's creative director at Puma and her direction is meant to trickle down to other ranges.
Puma has had strong connection with female athletes and consumers in previous years. It earned plaudits with projects such as the Nuala yoga apparel range a few years ago and has ongoing partnerships with creative women such as Vashtie Kola and Sophia Chang.
As Puma pointed out, the women's category has been outperforming other parts of the business, with soaring demand in markets such as China. Tights that are designed for yoga and women's training have “become the new jeans” for female consumers in some markets.
Puma has just launched a full-fledged training range for women, with new Pulse XT training shoes and an enhanced range of sports bras. Gulden could not provide any estimates on the current share of women's products in Puma's sales but he said that the impact from Rihanna's influence should be felt more strongly in the results for the first quarter.
More broadly, Gulden emphasized that the brand saw strong sell-through in retail locations where it was given more space, including its own stores. Apart from the Puma Lab concept launched with Footlocker, Puma expanded its partnership with Finish Line and Champs, through special shelving units and permanent in-store advertising. Intersport partnered with Puma for the brand's Evo Challenge football campaign.
When it comes to its own stores, Puma developed a new store concept launched last year at its head office in Herzogenaurach and implemented it at 14 other locations. With an assortment organized by sports and technologies, the store concept is particularly designed to enhance Puma's positioning as a sports brand.
Sales were also pushed by the second part of Puma's advertising campaign in the Forever Faster strategy, showing athletes training for upcoming events. This included Rihanna's first spot for the Ignite XT, Puma's new training shoe.
The stronger focus on service to retailers is apparently paying off. Puma's operation in the German-speaking countries ranked first in the fitness category, in a customer satisfaction survey by SAZ among 300 sports retailers.
Such improvements have been backed up by a more efficient structure. Among other changes, Puma has combined the leadership of Sportstyle and Fundamentals, two products groups that are not directly related to sports performance. Europe was combined under the same leadership as Eastern Europe, the Middle East and Africa, and the regional team in Asia-Pacific has been integrated into the global organization – meaning that five country and regional managers in Asia-Pacific report directly to Gulden.
Ludovic Manzon, previously general manager for Asia-Pacific and Japan, left the company in January and is apparently on his way to Sloggi, an underwear brand. The five managers are Takashi Lee in Japan, Olivier Lorans in South Korea, Philippe Bocquillon in China, Philippe Le-Bretton in Southeast Asia and Paul Gautier in Oceania.
At the same time, investments in IT are helping to make Puma's supply chain more efficient. The company has established Source Co to centralize the relationships between 120 subsidiaries and suppliers. The process will be complemented with regional hubs in the next two years.
Puma jerseys are to be worn by five teams at the European football championships in France this summer, from Italy to Switzerland, Austria, the Czech Republic and Slovakia. The brand intends to renew its Tricks range of football boots, offering left and right shoes in different colors.
The Olympic Games in Rio de Janeiro should be an opportunity to shine for many other Puma athletes, such as Usain Bolt and Rickie Fowler, whose swagger and current performance are adding to Puma's exposure on the golf course. Gulden indicated that the company would envisage investments in marketing for American sports in the next three to five years, to support further growth in the U.S. market.
As the end of the chief executive's initial three-year plan for the Puma brand's return to shape is in sight, the management has prepared another three-year plan. Taking account the current exchange rate situation, it has already been discussed with the company's majority shareholder, the Kering group.
