The Puma Story: The Remarkable Turnaround of an Endangered Species into One of the World's Hottest Sportlifestyle Brands

Citation

First, I. (2009), "The Puma Story: The Remarkable Turnaround of an Endangered Species into One of the World's Hottest Sportlifestyle Brands", Journal of Product & Brand Management, Vol. 18 No. 3, pp. 233-234. https://doi.org/10.1108/10610420910957861

This is the story of Puma. The story that chronologically presents the evolution of Puma from the year 1924, when Gebrueder Dassler Schufabrik Herzogenaurach, the common ancestor of Puma and Adidas was founded, all the way to the year 2007, when Puma's majority shareholder becomes PPR, the owner of Gucci, Yves Saint Laurent and Stella McCartney.

Each company has its ups and downs, but the up that Puma goes through during the last 15 years while Jochen Zeitz acts as its CEO is truly remarkable. This is the period in which Puma, after having become a very un‐cool discounter brand in the late 1980s and early 1990s undergoes three phases of restructuring to become a trendsetters' “must have” fashion item. The author refers to this transformation as a “turnaround of an endangered species into one of the world's hottest sports lifestyle brands”.

The book is divided into three rather different parts in terms of style and even content. The first part, titled The Dassler Brothers: Rise and Fall of a Dynasty, provides a lively novel type of description of a founding family drama. As the author himself implies, this part very much resembles the story of the American soap opera Dallas. It is the real life story of two brothers, Adolf and Rudolf Dassler, who in the year 1924 start a shoe factory in their home town Herzogenaurach in northern Bavaria. Adolf takes over market research and production, while Rudolf takes charge of company's finance, sales, and business strategies. The brothers work harmoniously and successfully during the first 25 years, when in 1948, due to their separation in the second world war and alleged love affairs, they grow to mistrust each other and separate once and forever. Adolf founds Adidas and Rudolf founds Puma.

The following years are marked with a furious fight between the two brothers and their families to gain a larger market share than the other. In their attempt to supersede each other, they pull out all the stops, focusing on the goal, rather than the means. Such a passionate battle during the 1950s and 1960s provides Adidas with great business success, and although Puma trails Adidas, it is also very happy with its growth. However the 1970s and 1980s bring serious business problems for Puma, resulting in it losing market share to US competitors. While Nike and Reebook's innovative products and marketing strategies come to create and dominate the leisure time footwear market, Puma completely fails to recognize its potential. Even more problematically, it lacks a clear strategic direction and goes deep into red figures. The years 1986‐1993 mark the end of the Dassler era as the company becomes public and Rudolf's heirs sell out their shares. Simultaneously Puma deteriorates into a cheap brand, sold at discounter shops, the share price reaches an all‐time low, and the company piles up huge debts. To add to its woes, its CEOs as well as majority owners change quicker than seasons. Puma's horizon is very cloudy, until unexpectedly a 30‐year‐old Jochan Zeitz becomes a CEO in 1993.

The second part of the book, titled The Return of the Cat, switches its focus of interest from (sometimes even very private) family affairs to the strategic corporate affairs. Zeitz, right after becoming CEO, proposes a restructuring plan to be conducted in three phases. The first phase during the years 1993‐1997 should serve to complete the restructuring and reduce the debts. This phase is famous for the 100‐point rigorous savings plan and the generous severance pays for those affected by the job‐cuts strategy. It is also a moment in which a very important strategic decision was made: to stop competing with Adidas on sheer volume but rather on image.

During the second phase, that is years 1998‐2001, Zeitz plans to invest a lot in marketing, product development, infrastructure and the creation of a brand identity for Puma. Those are the years the CEO transfers to the US so he can manage the important trend‐setting US market personally. More importantly, in this period Puma very determinedly turns to lifestyle and fashion footwear, entering Hollywood and, to a big degree, thanks to pop singer Madonna, conquering it. As the author on says: “All of a sudden Prada clothes and Puma shoes could be worn together” (p. 166). This is when Zeitz decides “Puma was to become the most desirable sports brand in the world – and consequently the most expensive. Not the biggest” (p. 167).

Finally, efforts in the third phase (2002 onwards) are supposed to make Puma the hottest brand in the sector and enable profitable growth of the company. Since Puma already conquered the lifestyle industry, it has to put more attention back on professional sport arenas. Puma applies its fashionable and cool brand identity to this target market as well. At first this seems a bit far fetched attempt since FIFA almost suspends Cameroon's national football team for their unconventional Puma outfit. However, feeling stronger than ever, Puma starts court action against FIFA. It ends up with a very favorable settlement, a lot of positive press and solidarity support for Puma.

The third part of the book, titled Chronology, is a systematic four‐page summary of the first two chapters, i.e. of the life of Puma.

By providing a very narrative style and sometimes very detailed descriptions, the author aims to bring the reader into the situation so to better feel and understand the facts and relations presented. For example on page 199 there is a description: “Zeitz appeared at the lectern wearing a jacket, black trousers and a white shirt with the two top buttons open.” While this is a very common and admired style for a novel, from a point of view of a business strategist such a style is somewhat diluting the main point and leaves the reader wondering whether the Puma story is a mere historical novel or a case study on brand management.

Overall, this is an easy‐to‐read book that provides an interesting insight into a life of a particular brand. In general, a reader might get a feeling that too much emphasis is given on historical affairs and facts and not so much on strategies. This is particularly true for the first part of the book. However, more explicit analytical emphasis on strategic decisions and reasoning behind would make even the second part of the book better learning content for both brand management practitioners and university students. Nevertheless, it is a refreshing experience to read a book on a topic of professional interest from a different, historical journalist point of view, so this book is to be recommended to both students and practitioners such as brand managers.