PARIS, France — Kering may be one step closer to offloading Puma, as part of its long-held pledge to become a pure luxury player. According to a report in French business magazine Challenges, the French conglomerate has appointed Rothschild & Co bank to handle the potential transaction.
A spokeswoman for Kering declined to comment on the report.
The news comes as Puma’s performance has shown signs of improvement, buoyed by innovative products and partnerships with celebrities like Rihanna. Sales growth recovered significantly since last year. Like-for-like sales in the third quarter had climbed to 17 percent, against 15.7 percent at the half-year and 10 percent last year. Meanwhile, operating margins (which stood at 5.7 percent at the half year) are set to double from 3.5 percent to 7 percent between 2016 and 2019, according to HSBC.
François-Henri Pinault, chairman and chief executive of Kering, has always brushed aside all rumours of sale, while calling the brand a non-strategic asset. “I think that it has been very clear and I won't change what has been said directly by the CEO of the group, that Puma is a noncore asset, that the group is focusing more on luxury,” Jean-Marc Duplaix, Kering’s chief financial officer, told analysts after third-quarter results on October 24.
“I think that Puma is on a very nice trajectory, and we will have the occasion to consider and to contemplate some options, but later and probably not short-term. So, let's work, first of all, still on the turnaround and let's deliver a very nice set of figures for 2017. That's the priority for us.”
Earlier this month, BoF reported that Kering is expected to pursue a dual track IPO-auction to spin off Puma, according to bankers in Paris and London. The move would involve preparations for a sale of Kering’s controlling stake on the stock market while simultaneously inviting bids for the German sportswear brand, the bankers said.