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SBD Global/February 18, 2013/Marketing and Sponsorship

Puma To Terminate Sponsorship Deals With Sailing, F1 As Part Of Restructuring Effort

German sportswear company Puma "was on the back foot again" Thursday as "plunging annual profits forced it to ditch sponsorships and slash its dividend," according to James Thompson of the London EVENING STANDARD. The sportswear group "also forecast that revenues for this year would be flat." Puma also said that "it would continue with plans" to close 90 loss-making stores, to leave it with 540 shops globally by the end of '13. Puma CEO Franz Koch, who will leave his position in March, said the company had assessed its sponsorship portfolio and "terminated endorsement contracts that are either unprofitable or are no longer part of Puma’s core categories going forward." Puma's pre-tax profits plummeted by 65% to €112.3M last year after "it was forced to discount to shift excess inventory." The company will "slash its dividend to 50 cents a share" (EVENING STANDARD, 2/14).

SAIL AWAY: REUTERS' Victoria Bryan reported Puma is to stop sailing sponsorship deals, including teams in the Americas Cup and the Volvo Ocean races, "as part of efforts to focus on sports and products that bring in the most money." Puma, which on Thursday reported '12 profit down 70%, "is going through its biggest reorganisation in 20 years to counter falling profits and encourage more people" in the U.S., Europe and China to buy its shoes and T-shirts. The group is closing stores, cutting products and last month said that "it would stop sponsoring rugby, leaving the Irish rugby union team looking for new kit." In sailing, Puma "will stop sponsoring the Oracle team, current holder of the Americas Cup," after the '13 season (REUTERS, 2/14).

HORIZONT's Jessica Mulch reported Puma "will terminate its sponsorship deal with F1 team Red Bull Racing." A Puma spokesperson said the decision is based on "marketing-strategic reasons." Puma has been Red Bull's official outfitter since '07. However, Puma "will keep F1 in its sponsorship portfolio as it is also the official outfitter of F1 team Scuderia Ferrari" (HORIZONT, 2/11).
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