The German sporting goods firm controlled by Kering saw a boost in fourth-quarter sales thanks to its social media-friendly collaboration with Rihanna and now has enlisted the youngest Jenner, sister of Kendall, to be the face of its new spring women’s training campaign slated to launch in April.
“The future is female. The market is growing disproportionately. We see more women across the world doing sports, also in markets where this hasn’t been the case — China and India are exploding,” noted chief executive officer Bjørn Gulden, speaking on a conference call with analysts on Thursday.
Gulden referred to Rihanna as “the door opener” and said the company was eager to keep the momentum going following the successful launch of the “Creeper,” a lifestyle sneaker designed in collaboration with the singer. The ceo said the style sold out globally in less than five weeks.
He compared the situation to the hysteria often observed at fresh drops of Nike’s Air Jordans, which cause fans to camp out over night. “We had women lining up at 6 a.m. because they knew it would be a limited edition. This has never been seen before in women’s. Rihanna proved she can sell sneakers,” Gulden said, flashing a picture of model-actress Cara Delevingne, another social-media powerhouse, wearing a pair on her visit to the White House in January.
Gulden said the brand would keep supplies coming in 2016, starting with the launch of a new full-performance shoe — the Fenty trainer — designed by Rihanna and slated to hit stores on Feb. 26.
The singer recently staged her first runway show for the brand during New York Fashion Week, which Gulden noted was well received.
Of the roughly 100 apparel pieces, only about 40 were to be commercialized, but Gulden said high-end retailers demanded to get the more couture-y items that were meant for the show only, as well. “Our people are now running around trying to make them commercial,” he revealed, adding that Rihanna’s creative influence has filtered down to the main line as well, including men’s.
The collection is slated to retail between 50 euros, or $55.7 at current exchange, and 2,000 euros, or $2,228.
While crediting the singer for igniting its footwear sales, Puma SE saw fourth-quarter profits squeezed by heavy investments in marketing, retail and information technology. The German sporting goods firm posted a net loss of 4.3 million euros, or $4.7 million, versus a loss of 4.6 million euros, or $5.7 million, in the year-ago quarter.
Puma’s ceo would not reveal how much the new deal with Kim Kardashian’s younger sibling, who boasts 51.5 million followers on Instagram, cost the company, but said marketing spending would continue ahead of the European soccer championships in France and the Olympic Games in Rio.
The firm also blamed adverse currency effects for a decrease in gross margin to 42.7 percent from the previous 45 percent, noting all categories suffered falling profitability.
Sales in the three months ended Dec. 31 gained 17 percent, or 11.5 percent on currency-adjusted terms, to 878.9 million euros, or $961.8 million.
Dollar figures are converted from euros at average exchange rates in the period.
For the full year, net profit fell 42 percent to 37.1 million euros, or $41.2 million, while sales increased 14 percent or 6.5 percent on currency-adjusted terms, to 3.4 billion euros, or $3.8 billion, the highest performance Puma has seen so far, according to Gulden.
“We know that we still have a lot to improve but feel that during this year we have strengthened the Puma brand, presented better products and further improved the cooperation with our retail partners,” he said, trumpeting sales gains across all regions and product categories in the fourth quarter.
Puma is forecasting sales to increase at a high single-digit rate for 2016 and the gross profit margin to remain flat at 45.5 percent.
The company’s shares closed up 2.5 percent.