The sports goods industry is hope that next year’s World Cup will help it to revive its flagging fortunes. Puma, the continent’s leading football brand, particularly hopes to boost sales. Chief executive Jochen Zeitz commented. ‘The soccer championship in South Africa will be a home match for us. Nobody has such a deep understanding of the African market as we have.’ In the past year the continent accounted for about 3 per cent of Puma’s €2.5bn revenues. This may seem a small slice of the total market, but sales of football, shoes and apparel have doubled every two years in Africa.
The sports goods industry is hope that next year’s World Cup will help it to revive its flagging fortunes. Puma, the continent’s leading football brand, particularly hopes to boost sales. Chief executive Jochen Zeitz commented. ‘The soccer championship in South Africa will be a home match for us. Nobody has such a deep understanding of the African market as we have.’ In the past year the continent accounted for about 3 per cent of Puma’s €2.5bn revenues. This may seem a small slice of the total market, but sales of football, shoes and apparel have doubled every two years in Africa. Puma is confident that revenues on the continent, with its almost 1bn inhabitants, would continue to grow faster than elsewhere. Puma, which is trying to make up lost ground on rivals Adidas and Nike, may not have as big a marketing budget for the World Cup as these competitors. But it sponsors 11 African teams, as well as Cameroon football star Samuel Eto. Puma is a supporter of the ‘Cotton made in Africa‘ initiative which aims to improve the lot of African cotton farmers. Unfortunately, US and EU subsidies to their cotton farmers squeeze them on the world market.
However, Mr Zeitz has warned that a good World Cup cannot compensate for the state of the world economy. All sporting goods makers are grappling with the effects of the global economic crisis, currency volatility and higher sourcing costs. Puma’s profits sunk to almost zero in the first quarter of 2009 as it launched a €110m restructuring programme. But its profit rebounded to €63m in the second quarter, representing a slight year-on-year increase. In some ways Puma, which is majority owned by French retail conglomerate and luxury group PPR, has weathered the economic crisis better than its rivals. Analysts considered it has streamlined its cost base effectively while Adidas was obliged to undertake a speedy restructuring because of problem areas that hit profits hard.