Puma Battling to Tear Stripe Off Adidas
July 28, 2005
The 2006 FIFA World Cup in Germany will not only act as the stage for crucial battles in the struggle for global soccer supremacy but will also provide sportswear firms with a platform on which they can jostle for position in one of the most competitive markets on earth.
In the same way that their most high profile team, Brazil, will be the ones to beat during the tournament so US sporting giant Nike will be the label all the others will be hoping to eclipse. And just as Ronaldinho and co. assume the mantle of unassailability at every opportunity, even a strong showing by their nearest rivals will not be enough to eclipse Nike, consistently the world's leading brand.
That leaves the also-rans battling for sales. That battle is likely to be most intense in Germany, the host country, where world number two and German powerhouse Adidas will continue to fend off the challenge from its biggest domestic rival, Puma.
Safe in the knowledge that the German national team will be kitted out in its uniforms and hoofed in its footwear, and that the World Cup tournament itself will be branded as an Adidas-sponsored event, the Munich-based sports behemoth could be excused for taking it easy next summer and reveling once more in the fact it is the German number one and second only in the world to probably the most ubiquitous sporting label ever seen.
Puma taking the fight to other market sectors
While the fight may be a losing one in the soccer stakes, Puma seems determined not to let Adidas have it all their own way in the rest of the market. The company unveiled a new strategy on Wednesday which focused on the launch of new product ranges where the label with the predator cat hopes to catch the three-striped beast sleeping.
Puma unveiled its latest plan to compete with its larger rival by targeting areas in which there are no clearly dominant leaders, namely the lucrative golf market and motorcycle racing.
Puma also revealed that it would be pursuing new markets through joint ventures and acquisitions. "We are going to launch five new categories of products in the next five years," chairman Jochen Zeitz announced at a press conference, with the emphasis on "lifestyle products".
The announcement of a plan to branch out comes at a time of increased confidence for Puma which recorded a 12.6 percent rise in net profit to 58.9 million euros ($70.7 million) in the second quarter of this year, and an increase of 12.3 percent in sales to 395.5 million euros, mainly owing to strong growth in the United States and Asia.
The company has also shown the ambition to go toe-to-toe with Adidas in the marketing stakes as it aims to move out of the shadow of its larger competitor and be recognized not only as a major German brand but a strong global one.
Bringing in the big guns of haute couture
After Adidas added Britain's Stella McCartney and Japan's Yohji Yamamoto to its design team, Puma hit back in May with the announcement that British designer Alexander McQueen would create a range of sports shoes for men and women which would become available in the market place in World Cup year. "I have always had a great passion for trainers," said McQueen, who has designed for Givenchy and Gucci, at the time.
McQueen joined a list of designers who had stepped outside the rarefied world of haute couture to bring a new twist to Puma's sportswear range. Puma has in the past used French design guru Philippe Starck and Japanese designer Yasuhiro Mihara to create shoe lines and supermodel Christy Turlington has created a collection of clothes for yoga.
Adidas recruiting big names to stay ahead
However, Adidas continues to wield its increasing power to stay ahead of Puma and keep up with Nike. Recently, the Germans executed a major coup over their major US rivals by poaching Andre Agassi after 17 seasons wearing a swoosh. The 35-year-old American announced the sponsorship switch to Adidas in June.
Adidas are also aware of the huge potential of non-linear partnerships, hooking up with partners outside the sporting world to get ahead in sectors such as the luxury sports market. One such partnership will see Adidas and Porsche Design develop and market luxury sports products, such as sports shoes, apparel, golf and tennis equipment, for a 2007 launch.
So while the World Cup may offer the two German firms the chance to battle it out on home turf for the scraps from Nike's table, the main event is shaping up in other areas of the sports market with both Adidas and Puma determined to do whatever they can to get the biggest slice before the other.