Puma is a strong player in the lucrative fitness League

  • Puma is a strong player in the lucrative fitness League
    Independent.t. E.
    When Swiss ACE Roger Federer stepped to Wimbledon in search of another Grand slam notch in his racket, his adoring fans have noticed small changes in his shirt.

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When Swiss ACE Roger Federer stepped to Wimbledon in search of another Grand slam notch in his racket, his adoring fans have noticed small changes in his shirt.

Gone the familiar logo of “Nike” is replaced by the less well-known Japanese brand uniqlo. It was later revealed that Federer has agreed to a deal needs to be paid for 10 years $300 million (€263m) to act as a brand Ambassador for Uniqlo.

With the support of the coup, as big as possible for the 36-year-old athlete, he stressed the financial strength of modern sports people and the excesses they can encourage the manufacturers of sports clothing.

Uniqlo is a creation of the 21st century. But Europe has become a pioneer in the business of making big money from the strange idea that if a fan wears the same shirt like Federer, he or she may be able to reproduce the same backhand volleys.

One of these experts of European brand is our company goal this week, the German company “Puma”.

What makes interesting a Cougar at this point is that at the beginning of this year, French luxury group Kering, has decided to reduce its 86pc of the shares 16pc.

Kering has purchased a Puma over a decade ago with the goal to develop a luxury clothing business.

Since then, he decided to focus only on luxury goods and his ambition sportswear pushed into row Z.

We wondered if this opens up the possibility for investment.

Puma was never so far from a good line. It originated in a family feud between two German brothers Dassler who worked as a shoemaker for 20 years.

The split created Adidas and Puma. However, the feud does not prevent two companies and their American competitor Nike, is changing the face of sports and in turn creating a greater profit.

Puma is managed by Bjorn Gulden, a former Norwegian international footballer. The group floated on the Frankfurt stock exchange over 30 years ago and today is the third largest group of sportswear in the world. She designs and sells footwear, apparel and accessories.

The secret in this game is to build up “stars” to sponsor your program and act as ambassadors of the brand.

Puma for many years, signed ‘the great’, as Diego Maradona, Pele, Usain bolt and clubs, like Arsenal, Borussia Dortmund and AC Milan.

It sells its products in more than 120 countries and while the company has a global presence, it is still a model would be in the sleepy Bavarian town of Herzogenaurach, where it all started.

The group’s sales last year was a record at €4 billion, given the shoes for half of total sales, clothing, a few more than a third of and accessories that make up the remainder.

Its global sales are concentrated in Europe and the United States, three quarters of the total sales. Asian market, driven by China, accounts for another quarter.

Despite the volatility in currency exchange rates, political instability and uncertainty in the terms of trade, the Puma in the middle of a revival after years of indifferent performance.

Last year the group, estimated at €6.2 billion, had a healthy growth with revenues of €4 billion Operating profit of €245m twice more than in the previous year and is expected to increase this year.

The shares have risen to an annual low of $ 277 per share and now trade at €411, falling from €539. The current price earnings multiple massive 38, EPS 11 and free cash flow is expected to exceed last year.

First quarter results continued the revival with sales up 7pc and operating profit to rise higher.

Like many others, Donald trump is causing headaches for Puma.

The group was forced to consider moving its Chinese production to other countries in Asia should us-China trade spat is worse. Currently, Puma produces one third of its products in China, a third in Vietnam, and the rest among other Asian countries.

The US is a key market for Puma, but to transfer production to the US is not an option because there are limited options of shoes on the market.

Despite the fact that the fault of the script is going, I wouldn’t invest in Puma at this time.

Nothing in this article should not be taken as a recommendation, either explicit or implicit to buy any of the shares.

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