Puma Is No Longer a Sneaker. It's a Lifestyle

When Puma transformed a venerable soccer cleat made famous by Brazilian footballer Pelé into a sneaker in 1998, the shoe known as the King sparked a global fashion sensation and an eightfold surge in Puma revenue in as many years. Yet ever since the German sporting-goods maker was bought by French luxury house PPR in 2007, the brand has performed like David Beckham during his Los Angeles Galaxy years.

Revenue growth slowed during the recession as larger rivals such as Adidas and Nike (NKE), which made their names in high-performance shoes, expanded into Puma's more fashion-oriented designer sports gear market. Puma sales grew just 3.1 percent from 2007 to 2009. "A lot of people jumped in on what their niche was, and suddenly they were left looking pretty naked," says Simon Irwin, an analyst at Liberum Capital.