French luxury group Kering has announced its plans to sell $1.0 billion worth of shares in German sportswear brand Puma, as part of its ongoing strategy to reduce its investment in Puma and focus more on its high-end luxury brands. This move comes as Kering aims to strengthen its position in the luxury market and capitalize on the growing demand for exclusive and high-quality products.
The company has launched the sell-down of approximately 8.9 million shares, representing around 5.9 percent of Puma’s share capital, through an accelerated bookbuilding process. The shares will only be available to qualified investors. After the transaction is complete, Kering will still hold 4.0 percent of Puma’s outstanding shares.
Kering first acquired Puma in 2007 and held a majority stake of 86.3 percent. However, in 2018, the company announced its intentions to gradually reduce its investment in the sportswear brand. Based on the closing price of Puma shares on the Frankfurt stock exchange on Wednesday, the transaction is estimated to be worth over 830 million euros or $1.0 billion.
The proceeds from this sale will be used for general corporate purposes and to strengthen Kering’s financial structure. The decision reflects the company’s strategy to shift its focus towards its luxury brands, including Gucci, Saint Laurent, and Balenciaga, which have been performing exceptionally well, especially in the Chinese market. The growing demand for luxury goods in China presents an opportunity for Kering to further expand its presence and cater to the evolving consumer preferences.
As the luxury industry continues to recover from the impact of the COVID-19 pandemic, Kering aims to optimize its position in the competitive luxury market. By divesting its stake in Puma, the company can allocate more resources and investments towards its luxury brands, fueling their growth and solidifying their position as leading players in the global luxury market.
Overall, Kering’s decision to sell a further $1.0 billion worth of shares in Puma demonstrates its strategic approach to align its portfolio with its long-term vision. The move allows the company to focus on its luxury brands, leverage market opportunities, and enhance its position in the luxury market.
Sources:
1. “Kering to Sell $1 Billion of Puma Shares as Part of Luxury Focus” – Bloomberg – https://www.bloomberg.com/news/articles/2021-04-07/kering-to-sell-1-billion-of-puma-shares-as-part-of-luxury-focus
2. “Kering to sell $1bn stake in Puma as luxury group targets high-end labels” – The Guardian – https://www.theguardian.com/business/2021/apr/07/kering-to-sell-bn-stake-in-puma-as-luxury-group-targets-high-end-labels
