SBJ/September 30 - October 6, 2002/Other News

Puma's sales expectations high

The U.S. operation of sports apparel and footwear company Puma AG Rudolf Dassler Sport is on a hot streak, and executives are projecting a nearly 40 percent increase in sales this year.

As a result, Germany-based Puma is expanding operations at its North American headquarters in Westford, Mass., to gear up for major growth in U.S. apparel and footwear sales.

Puma North America, whose roughly 90 employees share the 40,000-square-foot Westford space with staff from the parent company, is in the process of taking over the entire building.

Fifty staffers from Puma's parent company are moving to downtown Boston next month to set up shop in 20,000 square feet of space at the Boston Design Center in South Boston.

Puma AG CEO Jochen Zeitz, who spends roughly half of his time in the United States, will also make the move to Boston.

The company's recent success has been built on products designed to appeal to a young, urban demographic. Finding ways to hang on to that appeal is something company executives "talk about every day," said Jay Piccola, president of Puma North America. "How do we grow, expand distribution and stay cool?"

While the parent company doesn't break out figures for its subsidiaries, Piccola said the U.S. operation has seen no less than 19 percent growth each year since 1997, when it did about $28 million in sales, and projects a roughly 38 percent increase this year, largely on the popularity of its lifestyle line. Based on projected orders for the first half of 2003, the company expects annualized growth of 34 percent next year.

"It's a very, very enjoyable time to be here," Piccola said.

The same couldn't be said just five years ago.

In 1997, the U.S. operation was unprofitable, Piccola said. The following year, Puma, under Zeitz's direction, began readjusting the brand from a purely sports company into a lifestyle and fashion brand with an urban sensibility.

The company also improved its financial operations, Piccola said, adding that the work began paying off last year in the sports, lifestyle and fashion realms.

Attesting to Puma's varied appeal is the fact that the company's second-largest retail account, behind Foot Locker, is high-end department store Nordstrom.

"There's nothing like Puma in the marketplace today," said John Shanley, an analyst who covers athletic apparel and footwear for Wells Fargo Securities in New York. He added that with U.S. sales accounting for 40 percent to 45 percent of the overall business, there's room to grow.

Jill Lerner writes for the Boston Business Journal.

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