LONDON — The stock market may have reacted with a shrug, but those who know Puma SE’s newly appointed chief executive officer, Björn Gulden, say the company is in safe hands.
Puma’s share price edged down 0.5 percent to 226.65 euros, or $294.64 at current exchange, at the close of trading Thursdayy following theannouncement that Gulden would succeed Franz Koch as ceo. Hisappointment comes as French parent Kering, formerly called PPR, steps up efforts to improve the fortunes of the German activewear firm, whose profitability has been declining amid challenging market conditions and a major transformation and cost-reduction program.
Gulden, a 47-year-old native of Norway and a former professional soccer player, was most recently ceo of the Danish high-street jeweler Pandora, whose sales he rapidly helped to revive after an unpopular series of price hikes.
Prior to that, he served as managing director of the European footwear retail giant Deichmann, where he spent more than a decade. He also headed Deichmann’s U.S. subsidiaries Rack Room Shoes and Off Broadway Shoes as ceo and president.
Perhaps most crucially for his current role, Gulden spent eight years at Puma’s rival Adidas, as head of apparel and accessories, and helped to take that company public in 1995.
“This guy comes from Deichmann — the biggest footwear retail company in Europe; he did very well at Pandora, and comes across well to investors,” said Peter Farren, an equities analyst at Bryan Garnier in Paris who followed Gulden’s progress at Pandora.
Ulrik Garde Due, the former ceo of the Danish brand Georg Jensen, said Gulden was a “perfect professional and cultural match” for Puma and a highly respected executive. “He’s a former athlete; he fully understands the sporting world; he’s lived in Germany, and he was a very strong leader at Pandora, managing to pull the team together at a very sensitive time,” he said.
Jean-François Palus, chairman of the Puma administrative board and group managing director of Kering, said, “With Björn Gulden, we are pleased to have an experienced sports industry expert with proven leadership quality and know-how in managing sports and footwear brands taking up the reins of Puma.”
Puma said in December that Koch would step down as ceo “by mutual agreement” at the end of March after less than two years in the role. After years of swelling sales and profits under longtime ceo Jochen Zeitz, the brand hit a rough patch, with profitability declining over the last two years. Kering has since put in place a strategy to restore the company to its former glory and to play catch-up with competitors such as Adidas and Nike.
Financial industry sources said Gulden will have a far more complex job at Puma than at Pandora, where he was able to make changes relatively rapidly, reducing prices and discontinuing more expensive product lines.
“The only way Puma can ever dream about getting out of its hole is through massive investment in product and technology, in marketing and in promoting sports like football, where Nike and Adidas already have far bigger budgets for sponsorships,” said one source, who requested anonymity.
Earlier this year, Puma reported a net loss of 42.6 million euros, or $55.3 million, in the fourth quarter of 2012, while sales in the period rose 11.7 percent in euro terms, and 8.7 percent on a currency-adjusted basis, to 804.7 million euros, or $1.04 billion. The brand’s cost-reduction started in the second half of 2012 and will continue throughout 2013.
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