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Puma is one of the world's largest sportswear brands, but it hasn't always been that way. We chat with Jochen Zeitz, CEO of Puma, about his efforts to turn the business around and why the company is looking to the Middle East as the US market slows down.
Puma is one of Germany's largest exports but few will know that it has only been in the last decade that one of the world's biggest sportswear brands has started making a profits.
The man credited with reinventing Puma and turning it into one of the best-known lifestyle brands is CEO, Jochen Zeitz. Now the company is eyeing partnerships with fashion designers rather than celebrities to expand the brand, and other manufacturers are following suit.
"In 1993 the company was in disarray and it had lost money for eight consecutive years," he tells Arabian Business.
Following his appointment Zeitz created a four-phase plan in a bid to turn the company around. He describes the early phases as a complete rebranding process to create the sports lifestyle brand that it is today. "When we first time created the title ‘sports lifestyle' everybody thought we were crazy but now its part of the industry," he says.
"Now in 2008, Puma is in its final phases with three main objectives, which includes expanding further globally, venturing into new categories and looking at other acquisitions to complement the brand."
The Middle East and Europe was Puma's best-performing region in the last quarter with sales rising at around 20%. That contrasts with weak performance in the US, where the slowdown in the economy and declining orders from international retailer Foot Locker, hit profits.
"There are no regions which we are not represented in," says Zeitz following a global expansion of subsidiaries across Latin America and Asia.
"We have seen very strong growth in this region since we started in 2005 and we are prepared to continue to grow our business. It's part of our EMEA region, and we see good strong growth potential in the region."
Puma has come a long way from its original roots. The brand was established in 1948 at its company headquarters in Herzogenaurach in West Germany by Rudolf Dassler, whose brother Adi worked at Adidas.
Puma's early successes relied heavily on celebrity sponsorship. In the 1970's Jets quarterback Joe Namath would parade around Manhattan wearing his white Puma trainers, and fans bought thousands of pairs. Namath was paid US$25,000 a year plus 25 US cents for every shoe sold.
Puma's most recent reinvention as a sports lifestyle brand, however, was Zeitz's decision to collaborate with fashion designers rather than celebrities - a move which has now been copied the world over by its sportswear rivals. "10 years ago we were the first to collaborate with fashion designers," Zeitz explains. "At the time the market was very much a sports performance driven market, [but] we wanted to revolutionise it by bringing in style and bring fashion into traditional sportswear."
Today Puma is synonymous with top-end fashion designers such as Alexander McQueen and Jill Sander. Other collaborations include Italian motorcycle maker Ducati Motor Holding spA and last year it introduced a range of accessories with Dutch designer Marcel Wanders. The brand has also partnered with supermodel Christy Turlington for its yoga collection, Nuala.
Following on from the obvious success of Puma, other sports brands have followed suit. Larger rivals like Adidas have been similarly successful with partnerships with Stella McCartney. The fashion house is also owned by Puma's parent company, PPR - and Japanese designer Yohji Yamamoto for its Y3 collection.
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