Björn Gulden is a competitor.
Prior to becoming Puma’s CEO in 2013 — and even before stints with European footwear retailer Deichmann and neighborhood rival Adidas — the Norwegian was a mainstay on the pitch, playing professional soccer for clubs including 1. FC Nürnberg.
“I have a bachelor’s degree and MBA, but the biggest and best education I had for my challenges as a professional was what I did as an athlete,” the exec explained as he sat back in a plush leather chair in his office overlooking expansive views of Herzogenaurach, Germany. “I was also injured very early, so I had to work through the fact that you couldn’t compete at a high level and you had to change your plans.”
That kind of agility on the field prepared the global brand’s leader to tackle the biggest challenge for the 70-year-old company: winning over the U.S. consumer.
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“Forty percent of the sneaker business in the world is still done in the U.S.,” explained Matt Powell, senior sports industry adviser with The NPD Group. “For a trend to be truly legitimate, it has to go through the U.S. It’s critical that Puma becomes a big player here.”
There’s still a lot of work to be done. According to The NPD Group, Puma sits outside of the top 10 in overall U.S. sneaker sales, and it holds the No. 7 spot for its best performing category: sport lifestyle.
To fight back, Puma launched an aggressive push in basketball this year, a category it hasn’t been involved with in roughly 20 years.
“Basketball is a massive market and a tremendous opportunity,” said Ryan Cross, GM of basketball for Puma. “Very few sports have the global appeal that basketball does.”
Puma has also been busy recruiting the hottest names in sports and entertainment to rock its performance and lifestyle looks. The company’s most recent additions include four first-round picks from the 2018 NBA Draft, who join a roster that boasts megastar entertainers Rihanna, Big Sean and FN cover star Selena Gomez.
Those moves are paying off.
Puma has registered sales growth each year since 2014 and saw its biggest increase — 15.9 percent — in 2017. This year, the brand is projecting a 12 to 14 percent improvement.
Growth and transformation are on Gulden’s radar these days as Puma enters a new phase. With these strategies in mind, he spoke exclusively to FN at company headquarters about plans to impress U.S. consumers, Puma’s hoop dreams and how not to be deterred by the most daunting of challenges.
Tell us how Puma is different today
than it was 70 years ago. How has
the brand evolved?
“We’ve been given a gift, the people that work here, because of the history of the brand. We have a long history that almost no one else has. In the beginning, there were really only two brands, Adi and us, so we were part of creating the industry. Puma has always had personalities, from Walt ‘Clyde’ Frazier to [Diego] Maradona and Pelé early on, and fantastic logos — both the cat and the Formstripe. And Puma took this bold step in the late ‘90s to say sports are not only sports, they are also fashion. Then, somewhere in that, Puma got lost, probably because the fashion side took over so much that people didn’t see the need to invest in sports. When we came into this as a team [in 2013], we said let’s take the good stuff — the awareness, the logos, the history, the authenticity, the fashion — and put it together again. And because sports and street and sport and fashion have merged more than they had 10, 15, 20 years ago, we’re well positioned. We have a fantastic starting point. We have a high awareness. We have all the elements, but we’re still small. That’s why Puma is the best company to be with right now, because we have all the potential. You don’t need to defend $20 or $40 billion; we’re starting at $4 billion. We have a total global footprint. We don’t depend on one country or region; we’re 50 percent footwear so our biggest business is in the most difficult segment, and we haven’t exploited retail. And I’m not pushed to grow 25 percent a year and find new markets. We’re building the business stone by stone.”
What’s the state of Puma’s business today?
“We have turned the business from being very negative and going in the wrong direction to cleaning things up. We had a lot of work to do with infrastructure, and now we have a solid foundation to build on. We are not excellent in any one thing, but I think we have a brand that is coming back. We have infrastructure that’s starting to be competitive, we have people that are as talented as those at any brand, and we’re starting to put the pieces together to continue to improve.”
How much of your time is spent on crunching numbers versus creating the vision and product?
“Numbers is not the thing I spend a lot of time on. They’re there, so I know every day how much we’ve sold and every week what the profit is. I can just glance at my computer and know what it is. I spend much more time on people and product because those are the most important things we have.
“Working as a CEO or [in another] high position in this industry, it’s not just a job, it’s a lifestyle — you live the brand 24/7. Regardless of what you do, if you walk on the street or you’re in the airport, you see what people are wearing. You think about the industry one way or another all the time. I think if you ask my wife, she will say I’m 95 percent the company and 5 percent the family. But I don’t even see it as work; I never say I’m off or I’m going on holiday. I can’t shut off and say, ‘I don’t care what’s happening for the next three weeks.’ It doesn’t work that way.”
The women’s market has long been underserved, but brands are starting to pay attention. How is Puma appealing to women?
“Puma in the late ’90s and beginning of 2000s — and I’m not sure if it was consciously or unconsciously — created a women’s line with the Street Cat, the Speed Cat, the Mostro. And all of a sudden it was gone. When we sat down four years ago, it was clear we didn’t have a women’s strategy. We had products, but we didn’t have a strategy. So we put together a team and said this needs to be a big priority. That’s when Rihanna came in. I think the Rihanna thing woke up people again, like, ‘Oh, there is a Puma.’ The product we did with her created an acceptance of Puma both by women and men. It gave us legitimacy on the street fashion side again, and we’re now trying to take to the functional side. Then we added Kylie [Jenner] and Cara [Delevingne] and Selena, so we kept our brand acceptable by the younger female consumer. From a design and product point of view, we’ve been very honest and authentic with that consumer, and the product is made for her. It’s not a unisex thing we try to tweak to be a female product.”
How does Puma plan on recruiting ambassadors moving forward? Is the brand focused more on athletes or celebrities?
“Seventy-five to 80 percent of the investment in marketing is athletes or performance. If the ratio is 80/20 or 75/25, the major investment will always be in sport.”
What markets does Puma perform the best in?
“There are many markets where we are improving, and from a growth point of view, it’s China. There are markets where we are well positioned right now like the U.K., Germany, France, and South America if you look at Argentina and Mexico. And in India I think we are the No. 1 brand.”
What footwear categories are driving
“At the core it’s soccer. That’s what we started with. Then its track and field, running, training, golf. We do some indoor sports that you don’t know in America — handball, some rugby. And now, basketball.”
Why is Puma investing so heavily in basketball?
“The American consumer is very focused on American sports. One of them is basketball. And to be perceived as a performance brand in the US, you have to be visible in American sports. Basketball is the obvious one from all the people who play, who watch, and I think the history of Puma gives us a qualifier, a reason to be there. Also, basketball has a major play in the lifestyle area, both from a product and an attitude point of view. The American market is important for any brand that wants to be global, and as a global brand located in Germany, we’ve given our American team the freedom and funding to do what is right for the market.”
Looking back at Puma’s history, what moments are you proudest of?
“The most emotional picture for me is [track and field star] Tommie Smith in Mexico at the podium [during the 1968 Summer Olympics] when he won the 200 [meter] and the Puma shoes are standing next to him. It’s not because of Puma. [It’s] because of what Tommie Smith did, because Puma was part of it and because Tommie stayed a part of the brand. This is probably the proudest — or the most emotional — moment.”
What keeps you up at night?
“The funny thing about this industry is regardless if you’re successful or unsuccessful, you’re up or down, the number of issues you have to deal with is constant. Trends are changing, technologies are coming, markets are evolving — it’s a very dynamic industry to be in. So there’s enough to worry about if you want to worry about it. On the other hand, it’s a very fun industry to be in. I think I sleep as good or bad as I always have. It’s not correlated with the business. I sleep very well; I have the gift that I can sleep anywhere, anytime — in the car, on a bus, on an airplane, at home. That’s a gift that you get if you’ve been an athlete, traveled a lot and then work in this industry.”
Adidas and Nike are Puma’s primary competitors. What do they do well?
“They both are fantastic brands and companies. I have a lot of respect for both. Adi, they came out of the same family as Puma, and if you look at how much bigger they are than us, they have obviously done something better. I worked there myself, and I think Adi is a great sports company — the product has always been a focus and they have done a tremendous job. And Nike, after focusing on the American market and doing a great job, they went into European sports — especially soccer — and it took them a while, but I respect the effort, patience and quality of the work they put into it.”
What does Puma do well that Nike and Adidas don’t?
“I think we have to focus on us. We have a lot of ingredients to be very successful; we don’t really look at the competition and think about this as a competition.We should focus on our consumers, athletes, teams, sports, and do what is right for them. And indirectly, we’ll see what the competition is doing. It’s not like I see it as a competition I have to win or that I can lose. There’s enough consumers out there in the world that we can live very well, and we need to make sure we please them. That’s what will make Puma successful.”
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