Gucci owner sells ill-fitting Puma brand

A plan by France’s luxury goods firm Kering to give up control of Puma, focusing solely on catwalk and luxury brands such as Stella McCartney and Saint Laurent, sent the German sportswear outfitter plummeting as much as 16%.

The plan, under which Kering will distribute 70% of the shares of Puma to its investors, will leave Kering founder François Pinault’s holding company Artemis with about 29% of Puma.

Kering’s decision disappointed some Puma investors, who had hoped that the French company would find a buyer willing to pay a premium for the shares.

“This exit scenario is not the best one for Puma’s minority shareholders,” Cedric Lecasble, an analyst at Raymond James in Paris, wrote in a report.

“A straightforward disposal of Puma at a premium might have been partly priced in by the market.”

Also, Kering shareholders may decide to sell the Puma shares they receive in the spinoff, pressuring the stock in the short term, he said.

Kering, which has Gucci on its portfolio, follows rivals in cleaning up its portfolio after LVMH sold Donna Karan and Hermes International divested Leica.

The decision to spin Puma off is evidence of a lack of acquisition opportunities in luxury goods in the near term, Mr Lecasble said.

Kering bought Puma in 2007 as part of a push into sport and lifestyle brands that also saw the group acquire skateboarding brand Volcom. “The contemplated distribution of Puma shares to our shareholders would be a significant milestone in the history of the group,” Kering chairman François-Henri Pinault, the son of François Pinault said.

- Bloomberg


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