Big-Name Influencers Boosted Puma Q4 Sales

PARIS — As a sign of the times, Puma is focusing its marketing spend increasingly on a “wide scale” of influencers, or figureheads of “generation hustle,” as it looks to cultivate an authentic dialogue with the younger consumer, Bjørn Gulden, the brand’s CEO said Monday.

Gulden saluted Rihanna, who was appointed women’s creative director in late 2014, with having helped Puma “reconnect with the kids.”

“It’s important that we [connect with] this young kid who wants to be inspired by real stuff, and who wants to hustle for a good and cool life. It’s a very targeted way of communicating,” he said at the presentation of the brand’s full-year results at its headquarters in Herzogenaurach, Germany.

With sales on women’s categories still a major driving force of the business, driven by the Heart, Fierce and Platform footwear styles, Gulden didn’t share details on any upcoming projects with the singer, though she was listed among key brand ambassadors to be featured on the entertainment side of the brand’s marketing strategies in 2018, alongside the likes of Cara Delevingne and The Weeknd.

Her last show for the Fenty Puma by Rihanna line was held at New York’s Park Avenue Armory in September, though she’s been missing in action this season.

The German sportswear brand is also counting on recently signed ambassador and Instagram powerhouse Selena Gomez, with her 133 million followers, to spread the word.

The singer, who signed with the house in September, already has spurred engagement. An Instagram post of her first shoot for the company — modeling the Phenom shoe from its fitness footwear line — generated 4.8 million likes within hours as well as 54,000 comments, leading to almost 10 million interactions around the collaboration.

“You can follow the heat map in real time and how it spreads throughout the whole world in a matter of hours,” marveled Gulden.

While the sportswear brand’s own social media stats are not as impressive, with 6.6 million followers to date, the collective reach of the brand’s partners, he said, total around 535 million followers. “That means that when they do something, with or without Puma, it’s the driving force.”

Puma is also looking to bolster its family of male ambassadors as it readies its push into the American sports arena which, the CEO said, will be based on a “point of view” mixing a combination of field and stadium “plus the culture of sport, which has to do with entertainment and celebrities.”

Also expect to see more collaborations in the vein of the recently launched Hello Kitty hookup that unexpectedly “blew up,” with “people lining up at stores around the world,” he said.

In April, the brand will launch its Puma Track app, in which users will get to train with brand “assets” including Usain Bolt and Lewis Hamilton.

With 80 percent of Puma’s customers making purchases via their mobile phone, a platform launched last summer in Europe, billed as the first mobile-only development of Salesforce, will also be rolled out to the rest of the world over the next 18 months, he said.

Addressing parent company Kering’s decision to spin off the majority of its holding in Puma, meanwhile, Gulden said the transaction will not spark any changes in strategy.

As reported, the company is distributing 70 percent of its stake in Puma to shareholders, notably Artémis, which will become a “long-term strategic shareholder” of Puma with a 29 percent stake. Artémis holds a 40.9 percent stake in Kering and Kering will maintain a 16 percent interest in Puma going forward. About 55 percent of Puma’s stock will be free-floating on the stock market.

“My feeling talking to [Artémis] and François-Henri Pinault … pretty intensively over the last three weeks, as you can imagine, is that they see themselves as a long-term shareholder,” he said. “I don’t really see that changing other than, of course, there will be less pressure to find synergies with Kering operationally. But as a partner, I’m sure they will help where they can help. [Both are] very interested in sports and of course fashion.”

Puma will hold a Capital Markets Day on March 20 in London, however, where “we will go deeper into explaining the analyst and investors what we do and will give exposure to a wider part of our management team,” he said.

Maintaining its turnaround momentum, Puma in terms of outlook expects revenues to rise by around 10 percent in currency-adjusted terms, with the brand’s EBIT expected to total between 305 million euros and 325 million euros, up from 245 million in 2017.

Consolidated sales in the fourth quarter of 2017 rose 14.5 
percent in currency-adjusted terms to 1.04 billion euros, with double-digit growth in all regions boosted by strong footwear sales.

Net profit in the three-month period ending Dec. 31 amounted to 2.2 million euros, compared with a loss of 4.6 million euros in the same quarter last year.

Its gross margin — a key indicator of profitability — grew by 250 basis points in the fourth quarter to 47.1 percent, versus 44.6 percent in the equivalent year-ago period.

Boosted by double-digit growth 
in all regions, with an ever strong women’s business, sales for the full year passed the 4-billion-euro mark for the first time, rising 15.9 percent to 4.14 billion euros. Sales have grown by 40 percent at the brand since implementing its turnaround strategy in 2014.

Net profit more than doubled to 136 million euros, versus 62.4 million euros year-on-year.

Despite negative currency impacts, the full-year gross profit margin improved by 160 basis points to 47.3 percent, versus 45.7 percent in 2016.

Puma this year will be celebrating both its 70th anniversary and the 50th anniversary of its iconic suede sneaker.

The brand also announced it has signed three partnerships with football clubs, including a long-term partnership with AC Milan, effective July 1.

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