Puma Delays Soccer Push Until Kids See World Cup Shoes in ActionAaron Ricadela
The biggest event in soccer starts next month with the first kick at the World Cup. Puma SE won’t start its major promotional push until it’s all over.
Chief Executive Officer Bjorn Gulden plans a burst of ads later in the summer, counting on impressionable kids to pester their parents for new cleats as they head back to school. During the tournament itself, Puma will rely on the eight national teams it sponsors to promote the German company’s gear.
“The World Cup is a very, very crowded environment media-wise, from credit-card companies to car companies to God knows what,” said Gulden, a former German national league player, turning Puma’s new bright pink and blue cleats over in his hands. “The car companies and credit-card companies have deeper pockets than we have. You die quickly.”
Puma and bigger rivals Nike Inc. and Adidas AG are vying with companies including Visa Inc., Hyundai Motor Co., Coca-Cola Co. and Volkswagen AG for TV and Web visitors’ attention during the monthlong tournament that starts June 12 in Brazil. Gulden, a Norwegian who took the reins last year, is trying to stem a years-long slide in sales and profit at the company whose iconic logo once graced cleats worn by Brazilian soccer legend Pele and the New York Jets’ flashy football quarterback Joe Namath.
Instead of an ad blitz during the World Cup as Nike and Adidas are planning, Puma will unveil its “Forever Faster” ad campaign during the back-to-school season in August and September, Gulden said. The ads will star athletes that Puma sponsors, including Italian soccer player Mario Balotelli and sprinter Usain Bolt, along with London’s Arsenal Football Club.
“It probably makes total sense,” said Julian Easthope, an analyst at Barclays Capital in London who has the equivalent of a sell rating on Puma. “The World Cup is very crowded. Though they have a lot of teams in the competition, they haven’t got the best teams.”
Puma is outfitting Algeria, Cameroon, Chile, Ghana, Italy, the Ivory Coast, Switzerland and Uruguay. This month it introduced splashy cleats that clad player’s right foot in pink and left in blue. Several players will wear them at the World Cup, including Balotelli, Sergio Aguero of Argentina, Cesc Fabregas of Spain and Germany’s Marco Reus.
Emphasizing the back-to-school season also sets up Puma for introductions of new running shoes and Arsenal-branded soccer clothes heading into next year, Easthope said. In January, the Herzogenaurach, Germany-based company signed Arsenal from Nike for the priciest sponsorship contract in the club’s history.
Gulden is trying to reposition Puma as chiefly a performance-gear brand after several swings between sports and more casual “lifestyle” wear.
“The problem with lifestyle is, if it’s not rooted in sports over time, it’s hard to exist,” said Gulden, whose playing career included a year at FC Nuremberg in the mid-1980s. “Where we were in danger is we were selling lifestyle first.”
Puma is starting to spend more on marketing as Gulden seeks to make his mark. Such outlays are increasing, the company said May 14, after falling 11 percent last year to 544.1 million euros ($740 million).
“We expect cost growth to accelerate” in the second half of this year “as management invests in Puma’s largest-ever global advertising campaign” and plans a new store in Dubai for later this year, Berenberg Bank analyst John Guy said in a May 13 note to clients. He has a sell rating on the shares.
Puma’s first-quarter sales fell 25 percent and the company has said revenue won’t grow this year. Its unorthodox marketing approach could set the table for the future.
“The irony of the whole football thing is sales of football boots spike after the World Cup,” Gulden said.