Kering is trading in its Puma sneakers for Balenciaga ones.
For years, there have been rumblings and predictions that Kering would eventually sell Puma, which has been in its portfolio for 10 years — not necessarily because it wasn't performing (which it is), but because Puma was an outlier in the French conglomerate's stable of fancy luxury brands like Gucci, Saint Laurent and Balenciaga. A move to this end sounded imminent during Kering's most recent earnings conference call, when CFO Jean-Marc Duplaix noted that Puma is a "a non-core asset" and that Kering is "focusing more on luxury."
So it came as not too much of a surprise when Kering announced on Thursday that it plans to offload most of its holding in Puma, not through a sale, but by distributing the majority of its shares of the brand: As a result, Kering shareholder Artémis will own 29 percent of Puma shares and become "a long-term strategic shareholder" in the German activewear label, per a press release. About 55 percent of Puma shares will float freely on the stock market, and Kering will retain a minority stake of 16 percent.
"Kering would dedicate itself entirely to the development of its Luxury Houses, whose enduring appeal, built on creative audacity and innovativeness, will allow us to continue to gain market share and create value," said François-Henri Pinault, Chairman and CEO of Kering, in a statement. He's not totally hanging Puma out to dry, though: "We have laid strong foundations for a bright future for Puma. The full support of both Artémis, which would become Puma's main shareholder, and Kering, as a significant minority shareholder, reflects a strong confidence in the company's ability to continue to deliver its strategic and financial objectives."