One of the world's largest independent financial advisory groups, Rothschild &Co, is reportedly handling the sale of German sportswear brand Puma (Puma), owned by French luxury giant Kering, on behalf of the latter.
According to a recent report in the French media outlet Challenge, the plan by Kering, France’s second-largest luxury group, to divest its German sportswear company Puma SE has become increasingly clear. Rothschild will provide financial advisory services for the sale of Puma. Challenge also revealed that Puma, an independently listed company in which Kering holds an 86% stake, has been categorized by Kering as a non-strategic asset. Its current valuation is around €6 billion, an increase of approximately €1 billion from when PPR Group (now Kering Group) Chairman and CEO François-Henri Pinault acquired the brand in 2007.
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.”
The news that Puma will be sold by Kering has been circulating for several years, and François-Henri Pinault has repeatedly denied it. In an interview with the British media outlet Financial Times in June 2016, he declared: “There will be no sale of 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 has plans to sell Puma. Additionally, independent asset research firm Bernstein hypothesized that Kering is more likely to sell a partial stake in the Puma brand rather than selling the entire brand to an industrial or financial investment entity. Several major banks and consulting firms have stated in the past few weeks that now might be an appropriate time, and that Puma could very likely be sold by Kering in 2018.
Puma has performed exceptionally well recently, with continuously growing sales and significant improvements in financial data over the past few quarters. Through collaborations with popular female singers Rihanna and Selena Gomez, Puma’s sales have continued to rise, and the company has repeatedly raised its full-year 2017 forecasts.
The following are Puma’s core financial data for the three months ended September 30, 2017:
Total sales increased by 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 increased by 230 basis points to 48.1%;
Net profit was €62.1 million, with diluted earnings per share of €4.16, compared to €39.5 million and €2.64 in the same period last year.
The following are Puma’s core financial data for the nine months ended June 30, 2017:
Total sales increased by 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 increased by 120 basis points to 47.3%;
Net profit was €133 million, with diluted earnings per share of €8.94, compared to €67 million and €4.48 in the same period last year.
Source: Luxe.CO