Puma, the German sportswear giant with roots intertwined with arch-rival Adidas, is set to undergo a significant transformation as China’s Anta prepares to become its largest shareholder in a $1.8 billion deal. The move comes as the iconic brand, known for its leaping wildcat logo, grapples with declining fortunes and intense competition.
The proposed acquisition of a 29 per cent stake from the Pinault family, owners of Gucci-parent Kering, aims to inject new life into Puma.
The company, which originated from a bitter sibling rivalry a century ago when Rudolf Dassler split from his brother Adolf to form Puma while Adolf founded Adidas, has seen its market position erode. The two firms’ headquarters remain just a short walk from each other in the Bavarian town of Herzogenaurach.
Once a formidable competitor to Nike and Adidas, Puma has fallen behind, struggling to captivate consumers with products like its Speedcat sneakers. Meanwhile, Adidas has surged ahead with its popular retro Terrace shoes, widening the sales gap. The rise of newer brands such as On Running and Hoka has further intensified the pressure on Puma.
Morningstar analyst David Swartz noted that “Puma became … too dependent on maybe lifestyle products rather than performance sports shoes, which really drove this industry,” leading to lower revenues and reduced marketing visibility.
Puma’s CEO, Arthur Hoeld, formerly of Adidas, admitted in October that the brand “has become too commercial, over-exposed in the wrong channels, with too many discounts.”
Anta sees significant potential in the struggling brand, especially within the lucrative Chinese market. Wei Lin, Anta’s global vice president for sustainability and investor relations, told Reuters: “We have a lot of insight how to make Puma more successful in China. It is one of the most valuable brands in this industry.”
The deal, which pushed Puma’s shares up 9 per cent on Tuesday, values the company at approximately $6.2 billion, with its enterprise value appearing relatively modest compared to rivals.
Despite a rich history of outfitting athletes since 1948, Puma’s financial performance has been turbulent. Its stock peaked at 115 Euros in late 2021 but has since plummeted by 80 per cent, leaving its market capitalisation at 3.2 billion Euros – a mere eighth of Adidas’s value. Broader retail sector challenges and intense competition have exacerbated its difficulties.
The brand’s recent sneaker launches, including the Speedcat, have been overshadowed by the success of Adidas’s retro Samba and other “terrace” models, inspired by 1970s and 1980s football fan footwear.
In response, CEO Hoeld, who took the helm last July, unveiled a turnaround plan in October. This strategy includes cutting 900 corporate jobs, reducing discounting, enhancing marketing efforts, and streamlining its product range.
Felix Dennl, a retail analyst at German bank Metzler, highlighted Adidas’s strategic advantage, stating it “was a first mover in capitalising on the retro sneaker trend, roughly six months before Puma.”
This allowed Adidas to not only gain a “head start” but also “transfer the brand heat generated across lifestyle footwear into performance franchises.”
