When Anta Sports Products quietly announced it was purchasing a controlling stake in Puma back in January it flew mostly under the radar.
With more time to look into what this could mean for Puma, some questions have arisen. Is this a good thing, or does it spell doom for Puma’s management that could lead to an overhaul of their growing performance product line?
If you don’t know much about Anta Sports Products, you’re not alone. While they are the world’s third biggest sportswear company behind Nike and Adidas, their influence in the Americas falls well behind many other smaller brands.
Anta, however, does have a track record of buying into companies focused on performance products with a long-term eye on growth.
One only needs to look at the exploding popularity of the Salomon brand since its purchase by Anta in 2019. All of the success should not be attributed to Anta, as the global pandemic of 2020 saw a big increase in popularity for running, which helped put Salomon’s running products in front of more inquiring eyes.
A big part of Salomon’s success can be attributed to what was and is known as the “Gorpcore” movement, a trend of using outerwear commonly used for outdoor activities in everyday streetwear.
It also helps that Salomon’s road shoes have seen some recent success. Shoes such as the Aero Glide 3 and Aero Glide 4 are seen as big hits for the French brand. And while the more performance-based S/Lab Phantasm 3 and Ultra Glide aren’t lighting the world on fire, Salomon has seen some success from their S/Lab line as well.
When you turn back to Puma and how the acquisition by Anta can affect the brand, recent struggles may be worrying for dedicated Puma fans.
Over recent years Puma has fallen behind giants like Nike and Adidas, while upstart brands such as On and Hoka have gobbled up large slices of the global market share. On the surface, this could reek of “overhaul”.
For a long time, Puma’s best selling products were fashion-based items such as track suits (I’ll admit I still have a few in my closet) and their popular Speedcat shoes. What is now popular; the Deviate running shoe line and the Fast-R Nitro Elite, were not really a thing several years ago.
Puma relied too heavily on their lifestyle products while performance products in soccer, basketball and running lagged behind. In recent years, the Samba from Adidas and track suits from brands such as Fila, another subsidiary of Anta, surged in popularity while Puma’s have waned. A lot of this can be attributed to nostalgia-fueled purchases from aging millennials buying products that harken back to the 90’s (Guilty as charged). And Puma just wasn’t a big cultural player back then.
Puma CEO Arthur Hoeld also attributed Puma’s slide to market oversaturation, particularly in relying on discount chains buying excess inventory at wholesale discounts, which really cuts into a brand’s profit margins. If you’ve even been to a Ross, Marshall’s, or TJ Maxx, you know this to be true.
Hoeld’s immediate and long-term strategy is reported to be increasing Puma’s direct-to-consumer and e-commerce sales while reducing discount promotions.
Now this should spell anything but doom for Puma. What Anta sees in Puma is a big opportunity for growth in China, with Puma’s recent successes in their performance products, they see a winner that can expand, particularly in China.
Anta’s 1.8 billion dollar purchase of a controlling share in Puma is not just a purchase. It is an investment. It is a 1.8 billion dollar injection of capital into the brand, and quite possibly a vote of confidence of a bright future for Puma and the company’s growth.
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