Adidas AG confirmed Friday that it is interviewing Gulden as a potential successor to Rørsted as CEO. Rumblings of Gulden being in the running for Rørsted’s job surfaced earlier this week. Gulden’s post on Puma’s management board is set to run out at the end of this year. He has served as Puma’s CEO since July 2013.
In turn, Puma revealed Friday that Arne Freundt has been named CEO of the company and chairman of its management board. This is a promotion for the 42-year-old executive, who will take over the top job at the start of the new year. A 10-year veteran with Puma, Freundt was named chief commercial officer of the management board. In being named the athletic giant’s incoming leader, he has received a four-year contract, according to a Puma statement Friday. His responsibilities at Puma have included working in corporate strategy, global direct-to-consumer business and serving as general manager of the Europe, the Middle East and Africa region.
Executives at Puma declined further comment Friday.
Under Gulden’s leadership, Puma’s most recent annual sales increased 32 percent to 6.8 million euros and profits rose to 557 million euros, marking the brand’s all-time strongest results. In a farewell message to Gulden for his nine years of service, the chair of Puma’s supervisory board Héloïse Temple-Boyer thanked him “for his excellent contributions,” during his nine years of service “in which he brought the Puma Group back on track” and “made sure to leave it in outstanding shape.”
Gulden has a well-rounded résumé and knows the professional world of sports firsthand. Prior to joining Puma he served as CEO of the Danish jewelry brand Pandora. He also once held the managing director role at Europe’s largest footwear retailer Deichmann. The executive is no stranger to Adidas, having acted as senior vice president of apparel and accessories at the activewear brand at one point. Gulden’s 20-year tenure in the athletic industry also has included holding various management positions at outdoor apparel company Helly Hansen.
The Norwegian-born Gulden was a professional football player and played for 1. FC Nürnberg in the German Bundesliga and for Bryne and Strømsgodset in the Norwegian Premier League. Gulden’s departure from Puma and Freundt’s ascent are happening amidst a rocky economy, further intensifying the rivalry between the number-two Adidas and number-three Puma in the athletic sector. What appears to be a power play of poaching between Adidas and Puma is reminiscent of the highly competitive ’90s and 2000s, when the leading brands routinely wooed each other’s top-shelf talent. Such shuffling was intended to not just bolster one, but also weaken the other.
With Gulden on his way out the door at Puma and Freundt on his way up, Temple-Boyer said, “In Arne Freundt, we have a recognized leader within the company taking over as CEO. He is the ideal choice to continue Puma’s very successful path and to further accelerate the company’s momentum.” She said he “carries the Puma family in his heart, and will ensure that Puma continues to be the best partner for Puma’s retailers, suppliers and athletes.”
RBC Capital Markets’ analyst Piral Dadhania described Gulden’s departure as positive for Adidas and negative for Puma, given Gulden’s “material impact and contribution to the business during his tenure.”
In notes issued Friday, Dadhania noted that Adidas “desperately need a new strategy, with a renewed focus on execution, rebuilding product offering (particularly in lifestyle footwear) and to fix its China business once and for all.”
Expecting Gulden to be able to deliver on this, he cautioned “it is not likely to happen overnight. Further, there is real risk that [fiscal 2023] guidance will be materially below current consensus expectations [RBC’s earnings before interest and taxes are 25 percent below consensus], partly due to lost revenues/profits from Yeezy contract termination.”
Adidas faced a firestorm of criticism for not severing ties faster with Kanye West, the artist now known as Ye, after his antisemitic and racial remarks. Last month the company terminated the Adidas-Yeezy agreement. Yeezy generated an estimated $2 billion a year — nearly 10 percent of Adidas’ revenues, according to Morningstar analyst David Swartz. Dadhania estimates parting ways with Ye would amount to a 500 million euro loss of revenues in fiscal 2022, followed by 1.7 billion euros to 1.8 billion euros in lost revenues in fiscal 2023, which translates into a 250 million euro and 700 million euro to 750 million euro impact on net income, respectively.
In his analyst note, Dadhania wrote that Adidas’ share price was up 24 percent “which we believe largely reflects short covering given negative positioning in the stock.”
From his viewpoint, Adidas’ product momentum has not been strong enough compared to its competitors in recent years, despite the brand momentum remaining strong.
Adidas has flagged slowing consumer demand in western markets since early September, a significant inventory build-up and further deterioration of traffic trends in China. We expect inventory clearance to spill over into [fiscal 2023] and likely to add incremental margin pressure.
In terms of Puma, the RBC Capital Markets’ analyst said, “We do believe the Puma business momentum is strong, and see no reason why this would change in the near-mid-term, delivering largely on the strategic plan created by Gulden.”
In a statement issued by Puma Friday, Gulden said he opted not to renew his contract at the end of this year. “I have had nine great years with the Puma family, and I am very proud of what we have achieved together. Even during difficult times, we have had great momentum and have delivered record results in revenue and in earnings. This has been achieved by outstanding teams, our special culture and a great supervisory board.”
Gulden continued: “The board has been very supportive also in difficult times and always with a long-term view looking at what will be the best for the company and our people. I felt it was the right time for Puma, my successor and me to leave now. I still have a lot of energy and want to at least continue five to 10 more years in an operational role, which I think would have been too long for Puma. Arne has been working directly with me for nine years, has always been part of setting the strategy and making big decisions and has made a big contribution to Puma’s success. He knows my strengths and weaknesses and I am sure he will do an even better job than me.”