If it were up to Puma chief executive Arne Freundt, geopolitics and sports would be kept strictly apart.
“We believe it is our duty to uphold any professional athlete who wants to contend professionally on an international level,” said the boss of the world’s third-largest sportswear maker, adding that Puma did not care about an athletes’ gender, nationality or religion.
However, recent events have highlighted that not everyone shares this view. The news that Puma will conclude its sponsorship of Israel’s national football team caused a global stir, underlining the reputational pitfalls that international conflicts can pose to multinational corporations.
Puma said the decision was taken a year ago for strategic reasons as it was becoming more selective with regard to its partners. But pro-Palestinian activists hailed the advance as a response to their renewed calls for a boycott of the company as Israel continued its assault on Gaza in response to the October 7 Hamas attacks.
Supporters of Israel lashed out against Puma’s decision, with some accusing it on X of letting the country down in a moment of crisis and pointing out that the brand’s late founder Rudolf Dassler was a member of the Nazi party.
The acrimonious debate over Puma’s sponsorship of the Israeli team was Freundt’s biggest reputational challenge since he replaced Bjørn Gulden, who was poached by the German company’s larger rival Adidas.
“Unfortunately, some people are trying to exploit sport for their very own political agendas,” the 43-year-old told the Financial Times, adding that the end of the sponsorship agreement was just a normal part of business.
“Our portfolio of partners is constantly changing. We sign up new partners, conclude some older ones, and sometimes we reunite at a later point in time.”
His first 12 months at the helm of a brand that celebrated its 75th anniversary this year have been mixed. While analysts expect Puma to report a 5 per cent rise in revenues to roughly €8.9bn for 2023, hitting a record for the second straight year, they forecast a 2 per cent drop in operating profit, weighed down by higher raw material prices and heavy discounts in the US.
Puma’s share price, which has fluctuated over the past 12 months, is roughly where it was at the start of the year but remains more than 50 per cent down since peaking in late 2021.
“We cannot be satisfied with the current share price,” Freundt said, adding that the company needed to build more confidence in its strategy and into him as the new chief executive. “I am a new face to the capital market, and winning trust takes time.”
His towering predecessor had been in charge for the best part of a decade and almost tripled sales after saving Puma from an existential crisis.
For Deutsche Bank analyst Adam Cochrane, Gulden is still casting a shadow over his successor. “To a lot of investors, the main issue is that [Freundt] hasn’t really come out with anything different from the strategy as it was previously set out,” he said.
However, Freundt disputed that view, pointing out that he was investing heavily in strengthening the brand, had radically overhauled Puma’s marketing operations and repatriated them from the US, and had replaced critical decision makers both in China and America, where he wants to gain much more market share.
“We put things on the right track in 2023. But strengthening a sports brand does not happen overnight.” Freundt is confident that he can lift sales to €10bn by 2025.
Business partners are full of praise for the new Puma boss.
“I’ve been in the industry for more than 25 years and I have never met a CEO who is closer to his clients,” said Sven Voth, the founder and chief executive of shoe retailer Snipes, adding that Freundt was putting a lot of effort into building a real partnership with retailers. “He is personally on top of key topics, listens carefully and is very responsive.”
“Great communication skills” were among the attributes that impressed Freundt’s first boss, Carsten Liesener, a former partner at Siemens Advanta, the in-house management consultancy of the German industrial giant where Freundt started his career in 2005 after studying business at Leipzig Graduate School of Management.
“He is very empathetic and likeable and at the same time has a great analytical depth,” said Liesener. “He stood out right from the start.”
At Puma, which he joined in 2011 as the brand’s head of strategy, he is seen as the ambassador of a new management style that is more data-driven and team-minded.
The decision to conclude the sponsorship of Israel’s national football team, which was taken in late 2022 shortly after he was appointed chief executive, is a case in point: Freundt concluded that the squad had been underperforming for years as it had only qualified for an international football tournament once, in 1970, was ranked 75th in Fifa’s global ranking of 200 national teams, and with 9.7mn inhabitants was a small market for shirt sales.
“Arne has a very clear analytical view on the inputs he puts in, and the output he can expect,” said Matthias Bäumer, Puma’s head of team sport and a 16-year company veteran, adding that Freundt was seen internally as the start of a new era.
“From time to time, companies have to reinvent themselves, and Arne is leading a new generation of managers who are very successful at doing this,” he said.
A father of two, Freundt was also seen as a role model for a better work-life balance — an issue high up on the agenda of Puma’s workforce whose average age is 31 years.
“Arne is working extremely hard,” Bäumer said. “But he also makes sure that he has the time to attend his kids’ lantern parade.”
