In the wake of Wednesday’s announcement that Puma CEO Franz Koch will step down in early 2013, retailers and analysts said the firm’s business could continue to see challenges in the short term.
Christopher Svezia, an analyst with Susquehanna Financial, said the news didn’t come as a shock.
“Ever since [Koch] took over, the trends in the business have definitely been challenging,” he said. “At the time [former CEO Jochen] Zeitz left, some of these things were already starting to be in place, so it wasn’t like Koch inherited a business that was in rock-star status and he took it down. But he’s been there a year-and-a-half and the latest commentary and data points have not been encouraging from revenue and margin perspectives. Operating costs have just been higher, showing some inefficiencies in the organization.”
Koch, former head of global strategy for Puma, was named CEO in March 2011. He was the first to take the reigns after Zeitz was promoted in 2010 to lead Puma parent PPR’s sports and lifestyle division, following 17 years as the brand’s CEO.
And the prevailing trends may not favor Puma for the foreseeable future, said Matt Powell, an analyst for SportsOneSource.
“Puma business has really struggled recently. We are in a major technology-as-fashion cycle right now, and Puma is not known for its broad and deep technology portfolio,” he said. “A technology pipeline takes years to develop, [so there] won’t be a quick turnaround unless casual athletic makes a big comeback.”
Jean-François Palus, chairman of the administrative board, said in a statement that the company is entering a new phase in its development and changing its top management structure.
Other changes include the departure of COO Klaus Bauer and chief marketing officer Antonio Bertone, who will both leave their positions at the end of the year. Successors to both posts have not been named. And on Thursday, Puma announced a further departure: Reiner Seiz, longtime chief supply chain officer, informed the board he will be leaving his position after Jan. 31. Seiz has been instrumental in building the company’s global sourcing and supply network and in achieving Puma’s sustainability targets, the company said.
The company is beginning a search for a new CEO.
“Going forward, with the future CEO, who we aim to hire by spring 2013, we will pursue the reorganization of the company, focus on product innovation and marketing, and will continue to devote the necessary resources to the development of the brand,” Palus said.
Retailers said the brand, despite the challenges, has potential.
“Puma has been kind of an up-and-comer for us for a few years. It seems to be right on the brink of really doing a nice job, but it hasn’t quite hit there yet,” said a buyer at Orange, Calif.-based chain Shiekh Shoes.
And David Assil, president of L.A. boutique Madison, said he’s seen strong growth with Puma’s designer collaboration product, such as Alexander McQueen.
“The designers are getting better and better every season, and sales are increasing each season,” he said.