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Puma Seeks to Reboot With New CEO

Franz Koch to step down in March 2013.

PARIS — Puma SE said Wednesday it would recruit a new chief executive officer as its French parent PPR muscles in to improve the fortunes of the German activewear firm.

This story first appeared in the December 13, 2012 issue of WWD.  Subscribe Today.

 

Puma said Franz Koch, 33, would step down as ceo “by mutual agreement” at the end of March 2013, after less than two years in the role. He will also exit as a member of the group executive committee of PPR, which is in midst of transforming itself from a retail-heavy conglomerate to an integrated operator focused on apparel and accessories in the luxury and sport/lifestyle segments.

 

Koch’s exit marks the end of an era at Puma, for two decades associated with Jochen Zeitz, the architect of its initial transformation from a struggling sporting goods maker into a global lifestyle brand straddling sneakers for high-performance athletes like sprinter Usain Bolt and casual city sportswear, such as fleece hoodies and down jackets.

 

Effective Nov. 30, Zeitz resigned as member and chairman of the company’s administrative board, and has gradually pulled out of his operational duties at PPR to focus on his campaigning in the areas of sustainability and conservation.

 

In his 22 years at the Herzogenaurach-based brand, Zeitz helped sales climb from around 250 million euros a year to more than 3 billion euros in 2011. He also championed sustainable development, both at Puma and later at parent company PPR as a whole.

 

But Puma has hit a rough patch, with its profitability declining over the last two years.

 

In October, Puma said it would shut 80 stores as profits plummeted 85.1 percent in the third quarter. The company had also warned profits would be significantly lower in 2012 than the previous year, reflecting the impact of restructuring measures designed to offset a sharp decline in sales in crisis-hit Europe. Koch was one of Zeitz’s key deputies, succeeding him as ceo in mid-2011. He had joined the firm in 2007 and worked hand-in-hand with Zeitz on the conception and execution of the company’s “Back on the Attack 2011-15” five-year strategic plan to boost sales by 2015 to 4 billion euros, or $5.19 billion at current exchange.
 Prior to joining Puma, Koch worked for Oliver Wyman, an international management consultancy.

 

Until a successor is found, Puma said Koch would work closely with PPR group managing director Jean-François Palus “to secure Puma’s ongoing operational transformation and generate profitable growth.”

 

Once a new leader is in place, “we will pursue the reorganization of the company, focus on product innovation and marketing, and will continue to devote the necessary resources to the development of the brand,” Palus said in a statement. “I am fully confident in our ability to realize the huge potential of this iconic brand.”

 

“Together with Jochen Zeitz, Franz Koch has been the driver of strategic key initiatives and has strongly contributed to Puma’s development over the past few years. I would like to warmly thank Franz for his efforts, commitment and dedication to Puma, as well as his contribution to evolving the organization and management team,” Palus added.

 

Palus was elected as chairman of Puma’s administrative board in October following the resignation of Zeitz.

 

PPR declined to comment on the search process, or cite potential candidates.

 

According to sources, Puma needs a brand visionary that can capitalize on the brand’s cool factor. An understanding of Asian markets is also considered key, since it’s a pivotal territory for Puma’s bigger rivals — Adidas and Nike.

 

Separately today, Puma said its chief supply chain officer, Reiner Seiz, would exit the company on Jan. 31 after a 23-year career. His successor has yet to be announced. 

 

PPR acquired a controlling interest in Puma in 2007 in a deal that valued the firm at 5.3 billion euros, or $6.87 billion at current exchange. Today holds more than 82 percent of the capital. Shares in Puma eased 1.4 percent to close at 221.65 euros, or $287.39, on the Frankfurt stock exchange.

 

Puma is the core brand of PPR’s nascent sports and lifestyle division, which also includes the brands Volcom, Electric and Tretorn. PPR officials have cited the outdoor category as an area of particular interest for future acquisitions.

 

The management shift at Puma caps off a year of dramatic changes at PPR, which announced plans to spin of its Fnac music, books and electronics chain, and is in the throes of disposing of its Redcats catalog operations.

 

PPR chairman and ceo François-Henri Pinault also appointed new designers at Yves Saint Laurent and Balenciaga — Hedi Slimane and Alexander Wang, respectively — and acquired the Hong Kong-based jewelry brand Qeelin.