Rothschild & Co, one of the world’s largest independent financial advisory groups, is reported to have been commissioned by French luxury giant Kering to handle the sale of its German sportswear brand Puma.
According to a recent report by the French media outlet Challenge, the plan by France’s second-largest luxury group Kering to divest its German sportswear company Puma SE has become increasingly clear. Rothschild will provide financial advisory services for the Puma sale. The magazine also revealed that Puma, an independently listed company in which Kering holds an 86% stake, has been classified as a non-strategic asset by Kering. Its current valuation is around €6 billion, approximately €1 billion higher than when François-Henri Pinault, then chairman and CEO of PPR Group (now Kering), acquired the brand in 2007.
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Kering declined to comment on the report. The group’s Chief Financial Officer, Jean-Marc Duplaix, stated: “We will have some opportunities to consider certain options, but these will not materialize in the short term.”
Rumors about Kering selling Puma have circulated for several years, and François-Henri Pinault has repeatedly denied them. In an interview with the UK newspaper Financial Times in June 2016, he declared: “There are no plans to sell Puma in the short term.”
In April this year, François-Henri Pinault stepped down from Puma’s board of directors, fueling further speculation that Kering might be planning to sell the brand. Additionally, independent asset research firm Bernstein hypothesized that Kering is more likely to sell a partial stake in Puma rather than the entire brand to an industrial or financial investor. Several major banks and consulting firms have stated in recent weeks that now might be the right time, and that Puma could very well be sold by Kering in 2018.
Puma has been performing exceptionally well recently, with continuously growing sales and significant improvements in financial data over the past few quarters. Collaborations with popular female singers Rihanna and Selena Gomez have driven Puma’s sales upward, leading to repeated upward revisions of its full-year 2017 forecasts.
The following are Puma’s core financial figures for the three months ended September 30, 2017:
Total sales increased 13.3% year-on-year to €1.122 billion, or 17.4% at constant exchange rates;
EBIT was €101 million, compared to €60 million in the same period last year;
Gross margin expanded by 230 basis points to 48.1%;
Net profit was €62.1 million, with diluted earnings per share at €4.16, compared to €39.5 million and €2.64 respectively in the same period last year.
The following are Puma’s core financial figures for the nine months ended June 30, 2017:
Total sales increased 16% year-on-year to €3.095 billion, or 16.4% at constant exchange rates;
EBIT was €214 million, compared to €113 million in the same period last year;
Gross margin expanded by 120 basis points to 47.3%;
Net profit was €133 million, with diluted earnings per share at €8.94, compared to €67 million and €4.48 respectively in the same period last year.
Source: Hurun Report