Why Gucci owner wants to kick off its Puma shares

Luxury group Kering is seizing the chance to offload Puma at a price that just about covers its purchase cost 11 years ago

Usain Bolt at a promotional event for Puma

Gucci owner Kering has chosen an opportune moment to let go of its USD 4.9 billion stake in Puma. Sprinter Usain Bolt raised the visibility of the German sneaker brand, but problems at rival sportswear firm Nike have also helped Kering race out of its less than record-setting investment.

Under chairman and controlling shareholder François-Henri Pinault, Paris-listed Kering has spent the past decade and a half transforming itself from a retail conglomerate into a luxury group anchored by the Florence-based Gucci brand. Disposing of its long-suffering 86 % stake in independently listed Puma—most of which was bought for EUR 330 (USD 396) a share in 2007—is the final step.



The company’s approach to this disposal finally became clear late Thursday, when Kering announced the distribution of four-fifths of its shares to its own shareholders. These include Mr. Pinault’s investment vehicle, which will become Puma’s anchor investor with a 29 % stake. Kering’s remaining 16 % holding will be subject to a lockup period that has yet to be defined.

A spinoff will disappoint those that hoped for a cash sale complete with hefty takeover premium. This and the fact that a lot of Puma shares will change hands as Kering shareholders sell out explain the 6 % drop in the shares Friday morning. But a sale always looked unlikely, given the history of failure in sportswear takeovers: Nike never found a distinct enough voice for U.K. soccer specialist Umbro, and Adidas still has the same problem with Reebok.

Puma shares have had a strong run over the past couple of years. Sportswear has never been more fashionable, and Puma Chief Executive Björn Gulden is also credited with mounting a turnaround since 2013 by sharpening the focus on sports. But missteps at Nike, the industry leader, have probably also helped. Usain Bolt, still the athlete most associated with Puma, retired last summer. Kering is wise to strike while the iron is still hot.