No gold medal for Puma despite sports summer

No gold medal for Puma despite sports summer

Despite the a summer packed with major sporting events, with the Olympics starting this week and the European Cup football recently finished, Puma announced a decline in its net earnings and lowered its expected turnover growth from 10% to 5%.

Crisis is a damper

The economic crisis in Europe results in consumers spending less money, which is bad news for the German sport lifestyle company that achieves 45% of its turnover in Europe.

 

Net earnings dropped by 13% in the first half of this year (despite the fact that sales had gone up by 8.8%), due to an expensive reorganization which was necessary to better organize the company. In the second semester of this year, the cost could even amount to 100 million euro.

 

Other big players suffer too

Puma is not the only sport lifestyle brand that suffers because of the difficult economic climate. Market leader Nike also announced a lower turnover growth in China and on Wednesday, Adidas stated that it will have to close its Chinese factory (the only factory that is company-owned) to save costs.

 

Big fish in other markets like Danone, Deutz and steel-company Salzgitter, are feeling the crisis as well, and American goa,ts Hewlett Packard, Procter & Gamble and Starbucks also feel that Europe is suffering from a high burden of debt.

 

Stocks plummet

Unsurprisingly, the lowered expectations had their effect on the stock market. Puma's shares lost 5.1% of their value on Wednesday and they have only been able to recover a fraction of these losses.

 

Puma was founded in 1948 by Rudolf Dassler, after a dispute with his brother and Adidas's founder Adolf. Profiling itself mainly as a fashion brand in the last couple of years, Puma is now trying to claim a spot in the world of football, currently Nike's and Adidas's playground. PPR, the French luxury group that owns Puma for 80%, confirmed to fully support the new Puma strategy.

 

 

Translation by Sanne Raspoet

Questions or comments? Please feel free to contact the editors


Lidl launches Chinese web shop

22/05/2017

German supermarket chain Lidl has launched its own web shop in China on Alibaba’s online platform Tmall, similar to what many other Western companies have done.

This is Lidl’s battle strategy for the United States

18/05/2017

Mark the date: on 15 June, Lidl will open its first American store. In charge is someone who earned his stripes in Belgium and the Netherlands, but the main question is whether Ahold Delhaize should fear the German discounter’s arrival?

Chicago welcomes first Nutella Cafe

18/05/2017

Before the end of this month, Nutella fans can visit the very first Nutella cafe in Chicago. All types of sweet dishes are sold, most of them based on Ferrero’s chocolate paste.

Nestlé loses another battle in KitKat war

18/05/2017

Swiss chocolate manufacturer Nestlé has been trying to prevent competitors from creating chocolate snacks that look like its own KitKat brand for a decade. It has succeeded in about a dozen countries, but the attempt in the United Kingdom once again failed.

Colruyt to open fourth store in Grand Duchy of Luxembourg

18/05/2017

Providing everything goes according to plan, Colruyt will open its fourth store in the Grand Duchy of Luxembourg in November. Soon, it will open another three, although there is local dissatisfaction.

7-Eleven opens store without staff in South Korea

18/05/2017

American supermarket chain 7-Eleven has opened a South Korean store that operates without staff. Located in Seoul’s Lotte World Tower, the store uses biometric verification when processing payments.

Back to top