Sneakers designed by Rihanna helped Puma SE report fourth-quarter earnings that topped analysts’ estimates.
Source: Rihanna-Designed Sneakers Help Puma Top Fourth-Quarter Estimates – Bloomberg
When the roar of the crowd is all about Yeezy, and Nike continues to dominate, it seems that there isn’t a lot to discuss other than the fluctuating price of Under Armour. However, that isn’t the case. I am not to be taken as a consultant, but if I had to place a bet on the company that will shake up the women’s sneaker industry, which is an area that every brand is trying to crack, it would be Puma.
The company in recent years only had as its face Jamaican sprinter Usain Bolt. This hasn’t generated any interest at all among sneakerheads. The only Puma’s that generate buzz are collabs. Recent collabs with Staple and Kith still aren’t enough to shift the meter for the brand. I have always thought the German disconnect that affected adidas for so long was at the core of the problem of growth in the US for Puma (I almost feel that this sentence should be backwards, anyway…)
Puma didn’t have a product that was valued by the 18-25 year old market so the shoe basically languished on shelves and saw a reduced amount of shelf space in Footlocker. In the past few years Footlocker (who I think is headed towards blue chip stock status) created Puma Labs in their stores. This diversification of product kept Footlocker fresh, but it also helped Puma in staying steady while the company came up with something that would work.
Puma did what all companies are doing, they delved into the retro catalog, but it was the signing of Ri-Ri that has shifted the company and has seen the brand which began the year trading at 197 rise to 251. Obviously had you found a way to pick up shares last year, you’d be pretty happy with this increase. Do I think Rihanna is enough to continue to bolster the stock?
No. I think the stock will drop, but not until after the holiday season. Puma finally has resale value and when a company begins to garner sales on the aftermarket/grey market they will begin to increase their longevity. I think they still have to find a male endorser because the women’s market is very difficult and by my own store experience the women’s market is run by a much smarter consumer than the men’s market. Click the source link for more info.
