Puma Banking On World Cup, Emphasizing Sportswear After Trimming Forecasts
Puma is "banking" on this summer's World Cup and a "renewed focus on its technical sportswear to counter currency effects that prompted the company to trim its profit margin forecasts on Wednesday," according to Emma Thomasson of REUTERS. Early sales of shirts for the eight teams Puma is sponsoring at the World Cup -- including Italy, Chile and Ghana -- helped to "slow sliding sales in the first quarter." But like many European businesses that "rely on overseas sales in foreign currencies, Puma's profitability is being squeezed by the relative strength of the euro." Puma, which slipped "further behind" Nike and adidas in recent years after a "foray into fashion, is spending heavily on marketing and sponsorship to restore its reputation for sports performance." Puma CEO Björn Gulden said, "We know that the repositioning of Puma and the turnaround of the business will take time, but I am convinced ... that we have initiated the right projects to make 2014 the start of the turnaround." Rather than "pouring cash into marketing" during the World Cup, which Gulden said would be "crowded by brands from cars to credit cards, Puma plans its biggest campaign to date in August, showcasing athletes including sprinter Usain Bolt," Italian footballer Mario Balotelli and golfer Rickie Fowler. Gulden said that the campaign is "timed to coincide with the busy back-to-school season, which should also be supported by post-World Cup sales, particularly if one of the Puma-sponsored teams performs well." Gulden: "You should not be surprised if there is a Puma team in the final" (REUTERS, 5/14).