Puma versus Adidas – the brother duel has never been so absurd

At his first public appearance as CEO, Arne Freundt first has to present the triumphs of his great rival. Because Puma can look back on the most successful year in its company history.

The third largest sporting goods manufacturer in the world increased its sales by 19 percent to almost 8.5 billion euros and generated an operating profit of more than 640 million euros. Super numbers, which, however, still go to the account of the previous Puma boss Bjørn Gulden.

His surprising and short-term move to Adidas on the other side of the city of Herzogenaurach caused a stir at the end of last year. The poaching of its direct competitor was a coup for the struggling company with the three stripes after its various profit warnings, the sacking of the unsuccessful CEO Kasper Rorsted and a mudslinging that was disastrous in every respect over the openly anti-Semitic cooperation partner Kanye West. The nomination of the new boss alone increased Adidas' market value by four billion.

The new boss at Adidas' challenger Puma, on the other hand, hardly received any attention in the boss castling of Herzogenaurach. Because unlike Rorsted and Gulden, this one is largely a blank slate so far. That should change now. Arne Freundt, who turned 43 in January, takes the stage at his first balance sheet press conference as CEO with a jovial “morning”. His outfit is sporty, as is typical for the industry – blue hoodie, orange running shoes, all from his employer, of course.

Unlike some other CEOs, the casual outfit on him doesn't look prescribed, but natural. No wonder. Freundt is more or less a Puma homegrown - made big by his mentor: Bjørn Gulden.

As much as Gulden's move to city rivals Industry and Stock Exchange came as a surprise, the nomination of his successor at Puma did not. "Freundt was already being traded as a possible successor in 2020," says Zuzanna Pusz, sports industry expert at UBS Investment. "He was well prepared for his role and, like his predecessor, stands for an open, long-term management style."

In fact, Freundt was something of a foster son of Bjørn Gulden. Born in Hamburg, who lives in Munich with his wife and two sons, he has made a steep ascent at Puma under Gulden's supportive hand. After studying economics and law in Oestrich-Winkel, Hesse, and later in Leipzig, as well as semesters abroad in Sydney and Strasbourg, his only professional position was a few years at Siemens Consulting before Puma, where he started as strategy manager in 2011.

A career springboard that had previously catapulted predecessor Franz Koch into the executive chair. Within a decade, Freundt first became retail and e-commerce director, then head of Europe, before Gulden brought him to the board in 2021. By then it was clear who Gulden saw as his successor. No one suspected - least of all at Puma - that the change in leadership would happen so quickly - and that the mentor would become a competitor.

Freundt's main problem now is the demarcation from his foster father. "Freundt developed and implemented the successful Puma strategy of the last few years together with Bjørn Gulden," says analyst Pusz. Which also means that Gulden knows every detail of the Puma strategy and every product development in their quiver. How it could happen that the CEO of all people had apparently not written a non-competition clause in the employment contract? At Puma you only get a helpless shrug of the shoulders when you ask this question.

With his first annual PK, Freundt is all the more trying to set his own accents in addition to continuity on the road to success. He names three essential fields of action in which he would like to set himself apart from the Gulden strategy, the sins of omission of his predecessor: Brand profile. China. UNITED STATES.

“In China, our market shares are well below the global average. It's hard to see why that should be the case," Freundt criticized the performance under Gulden. While Adidas turns over three times as much worldwide as Puma and Nike five times as much, the competitors in China are ten times as strong.

Although competitor Adidas has lost a lot of money in the country due to boycott calls and Corona, Freundt sees potential here and plans to attack. A flagship store has just opened in Wuhan. Its design, but also the products sold there, were developed in China for Chinese consumer tastes.

India, where Puma is the market leader and equips cricket stars and Bollywood beauties at their side, is a role model for success in a large but very individual market. In recent years, Puma has also managed to make a name for itself as a basketball manufacturer in the USA, with a local development department and great autonomy on the part of those responsible locally.

"We see ourselves as the biggest anti-corporate," says Freundt, they want to be more of a start-up than a corporation. Although he is still dissatisfied with the proceeds achieved and would like to advance into higher price segments, Freundt sees in the US story "a blueprint" for a strategy that relies heavily on regionalization.

A big opportunity for Freundt lies in the current weakness of the competitor from across town. In the coming week, he will present a balance sheet that is likely to be significantly less pleasing than that of Puma. Gulden had to issue a profit warning as the first public official act in the new job. Adidas is threatened with a loss in the hundreds of millions this year.

Freundt now wants to use this to wrest market share from his former boss. He wants to achieve this by sharpening the brand image, which he believes Gulden has neglected. Freundt wants to profile Puma as a casual sports brand. In contrast to the Adidas brand, which is strongly associated with performance, Puma should above all stand for “joy in sport”, cooler and more relaxed.

In addition, there is a strong focus on women, which Puma not only wants to reach with fashion products, but also with football and basketball shoes specially developed for women. Half of Freundt's board of directors is female, and there is no gender pay gap. And Puma's next big brand ambassador is also a woman.

Freundt begins the message at the end of his first balance sheet PK with a sentence that he copied from the presentations by former Apple boss Steve Jobs. "There is one more thing," he says almost as he walks - there is one more thing: Pop icon Rihanna and Puma want to develop and market products together in a multi-year cooperation, after a similar cooperation five years ago.

"Rih-Turn" is what Puma calls it and hopes for a lot of visibility on the US market. A failure like Adidas with Kanye West is not to be feared, says Freundt, they have known each other for many years. However, it is unlikely that Rihanna will wear Puma sneakers at the next Super Bowl, the regulations prohibit that. Because it's sponsored by Nike.

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