Puma shares slump as luxury group Kering plans spin-off

Cornelia Mascio
Gennaio 13, 2018

"Having more brands in the portfolio is not the focus at the moment", Bjorn Gulden told journalists during a conference call after French conglomerate Kering announced late on Thursday that it planned to spin off Puma to its shareholders. "It would allow us to continue with our current business strategy that has started to show some good results".

“We are very pleased that Kering has proposed this way to reduce its stake in PUMA. "We would be able to carry on to invest in becoming the Fastest Sports Brand in the world, create value for retailers, improve performance for athletes and excite consumers".

Kering, whose brands range from Gucci to Yves Saint Laurent, plans to distribute 70 percent of Puma to its own investors, retaining only a 16 percent stake in a business which is finally making strides after 10 years under its ownership. As a outcome, Kerings largest shareholder Artémis SA* would receive approximately 29% of PUMAs share capital and would become a direct and long-term shareholder.

An upturn in the luxury goods industry, meanwhile, underpinned by a revival of Chinese demand, has boosted Kering's fashion brands, and analysts said many of these, including Balenciaga, had strong potential.

The transaction would increase PUMAs free float from now 14% to approximately 55%. Kering and Artémis, however, would remain strong partners and shareholders, which proves that they believe in our strategy and PUMAs future success, ” said Bjørn Gulden.

The price of this transaction, which will go in front of shareholders of Kering in April at the annual meeting of the group, has not yet been determined.

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Puma's partnership with the singer Rihanna has been particularly successful in not only generating sales but buzz for the brand. He further half-joked that one of the perks of being part of Kering was being to provide a Gucci suit to sprinter Usain Bolt, the brand's biggest name on the sports side, for a major social event.

Kering, however, says the deal to spin-off the brand will allow it to reinforce its status as a leading luxury pure player with an enhanced profitability. Kering's founder, François Pinault, will allegedly get 29 %.

Puma will also continue to own Cobra Golf, which was acquired in 2010 and combined with its Puma Golf business.

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