Puma shares have plummeted 16%, the most in 16 years, after parent company Kering announced plans to relinquish its control of the German sportswear brand.
The move comes as the French designer, who owns brands such as Gucci, Alexander McQueen and Yves Saint Laurent, aims to focus solely on luxury and catwalk brands.
Investors will receive a 70% distribution of Puma shares, leaving Kering founder and billionaire businessman Francois Pinault’s holding company Artemis with about 29% of Puma.
After Kering’s shares initially rose 1.6% to a record high, they fell as much as 2% in Paris, indicating that shareholders remain sceptical. Investors had hoped Kering would find a buyer willing to pay premium for the shares. Sophie Park, an analyst at Bank of America Merrill Lynch, also cut Puma shares from buy to underperform.
The French manufacturer is not the only European company to start cleaning up its portfolio after Parisian rival company LVMH sold Donna Karan, whilst Hermes stripped camera company Leica.
Puma’s Chief Executive Officer Bjoern Gulden, however, welcomed Kering’s decision, stating that it allows Puma to continue with its current business strategy. He added that there will be no changes to the strategy despite the change to ownership.
Kering will retain about 16% of Puma’s outstanding shares, remaining as a long-term shareholder despite earlier speculation that it would exit entirely. Kering bought Puma in 2007 in order to break into the sport and lifestyle market, also acquiring skateboarding brand Volco and Cobra Golf.
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