Puma leaps ahead with healthy sales growth

Singer Rihanna (right) showcasing her Fenty for Puma Spring/Summer 2018 collection (far right) during New York Fashion Week in Manhattan last month.
Singer Rihanna showcasing her Fenty for Puma Spring/Summer 2018 collection during New York Fashion Week in Manhattan last month.PHOTO: REUTERS

BERLIN • Puma is taking a great leap forward after a new collection from singer Rihanna helped drive sales growth, with the German sportswear company raising its outlook last week for 2017 sales and operating earnings.

Puma said third-quarter sales rose a currency-adjusted 23 per cent in Europe, the Middle East and Africa, 16 per cent in the Americas and 10 per cent in the Asia-Pacific.

Like its German rival adidas, which reports results on Nov 9, Puma has been enjoying a revival in the United States market as shoppers snap up its retro styles instead of basketball shoes, hurting Under Armour and Nike.

Puma, which was bought by French luxury goods company Kering in 2007, had been struggling for years, but analysts expect Kering could seek to sell its stake next year now that the German brand is performing well again.

Puma's market capitalisation is €5.3 billion (S$8.5 billion) - back at the level at which Kering bought it.

Kering is expected to pursue a dual-track initial public offering-auction to spin off Puma next year, the Business Of Fashion website reported, citing investment bankers in Paris and London.

Puma said growth had been clawed out in particular by footwear, with sales up a currency-adjusted 23 per cent, and accessories, whose sales rose 24 per cent.

Singer Rihanna (right) showcasing her Fenty for Puma Spring/Summer 2018 collection (far right) during New York Fashion Week in Manhattan last month.
Singer Rihanna showcasing her Fenty for Puma Spring/Summer 2018 collection (above) during New York Fashion Week in Manhattan last month. PHOTO: REUTERS

Demand for apparel was up 8 per cent.

Puma said its retro Basket Heart sneakers and Ignite Limitless running shoes were particularly popular. Women's sales were helped by a Rihanna collection that was launched last month.

A partnership with singer and actress Selena Gomez also gave new bite to Puma's earnings.

Puma named Rihanna as its women's creative director in 2014 as sportswear firms seek to tap the booming market for female leisure gear, which helped propel the ascendancy of the likes of yogawear chain Lululemon Athletica.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 26, 2017, with the headline 'Puma leaps ahead with healthy sales growth'. Print Edition | Subscribe