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Puma Owner Kering Said to Have Explored Sale of Sportswear Maker 2014-12-15 19:53:59.721 GMT
By Aaron Kirchfeld, Dinesh Nair and Ruth David (Bloomberg) -- The owner of Puma SE has explored a sale of the German sportswear maker as efforts to revive the brand drag into a fifth year, according to people familiar with the matter. Kering SA, which also owns Gucci, contacted potential buyers earlier this year to gauge interest, said the people, who asked not to be identified because talks are private. Sovereign- wealth funds from the Middle East such as Qatar as well as Asian investors were approached, they said. The discussions have yet to lead to any sort of takeover proposal and it remains unclear whether the company will still pursue a sale of the brand, the people said. Representatives for Kering, Puma and Qatar declined to comment. Kering owns about 86 percent of Puma, having acquired control of the sporting-goods maker in 2007. Puma, which has a market valuation of about 2.5 billion euros ($3.1 billion) based on the remaining traded shares, is revamping athletic shoes and stepping up marketing as it seeks to reorient the company’s positioning around performance gear. Kering is also making changes at Gucci, where the top two executives are stepping down amid faltering growth. In April, Kering Chairman Francois-Henri Pinault said he was convinced the company should have a sports and lifestyle division that wouldn’t be expanded until he’d revived Puma. Mario Ortelli, an analyst at Sanford C. Bernstein, is skeptical about Kering owning a maker of sporting products, which have much lower margins than luxury goods. Competitors such as Adidas AG and Nike Inc. are much bigger than Puma, meaning they can spend more on marketing and developing their products, he has said. Puma, known for its leaping cat logo, this fall unveiled its “Forever Faster” ad campaign, featuring athletes such as sprinter Usain Bolt and soccer player Mario Balotelli, helping boost footwear sales for the first time in seven quarters. The brand’s ad budget and sponsorship deals, including with English Premier League team Arsenal, are cutting into profit, which in 2014 may be less than half what it was a decade ago, according to analyst estimates.
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--With assistance from Andrew Roberts in Paris, Manuel Baigorri in London and Aaron Ricadela in Frankfurt.
To contact the reporters on this story: Aaron Kirchfeld in London at +44-20-3525-8830 or akirchfeld@bloomberg.net; Dinesh Nair in London at +44-20-3525-3212 or dnair5@bloomberg.net; Ruth David in London at +44-20-3525-8095 or rdavid9@bloomberg.net To contact the editors responsible for this story: Celeste Perri at +31-20-589-8505 or cperri@bloomberg.net Paul Jarvis