New products, sporting events and Rihanna boost Puma

Upcoming major sporting events including the European Championships in football, Copa América and the Olympics are boosting sales at Puma.

Kering-owned Puma said Friday its opening quarter net profit rose 4 percent to 25.8m euro, helped by improved sales in central Europe, strong performances in its footwear and women’s businesses, all underpinned by the “successful” launches of new products and marketing concepts.

The company cited strong sales boosted by “better product offer and improved consumer experience” in its stores, as well as expansion of new stores built with the new ‘Forever Faster’ store design.

“The first quarter of 2016 developed as we expected,” said Puma Chief executive Bjørn Gulden. “Both in our own retail and with our retail partners we see a continuous improvement.”

Puma shifted gears to boost womens market

In the early 2000s, Puma experienced tremendous growth in the lifestyle and fashion segment, but with as with all trends, tastes changes and Puma’s sales dwindled. Since Mr. Gulden’s appointment in 2013 he has worked to shift the company’s focus back to sports and performance, paying particular attention to female consumers.

Puma responded by contracting pop star Rihanna for a collaboration called Fenty x Puma, which debuted at New York Fashion Week earlier this year.

NPD Group data suggested that Rihanna was the most marketable of all ”big name celebrities”. Her resonance with consumers seems to have had an impact on Puma figures too, said NPD analyst Matt Powell.

“Many celebrities take months to lift a brand, if at all. In the case of Rihanna, the reaction was almost immediate,” he added.

Rihanna became Puma’s women’s creative director just over a year ago, helping the brand make inroads in the women’s market. That deal, and this summer’s Euro 2016 soccer tournament, will boost revenue in 2016, according to Berenberg analyst Zuzanna Pusz. Puma forecast sales this year will increase at a high single-digit rate, with gross margin expected to be the same as last year’s 45.5 percent.

Images: Puma Facebook