The PUMA Group owns the brands PUMA and Cobra Golf as well as the affiliate company Dobotex. Dobotex is a product-licensing specialist that designs, produces and distributes underwear and socks for global sports and lifestyle brands.
PUMA is structured into four regions: Europe, EEMEA (Eastern Europe, Middle East and Africa), North America and Latin America. As our Asian markets are quite heterogeneous, our Asia-Pacific areas interact directly with our global organisation with no regional reporting level in between. Each region and area is led by a General Manager with full profit and loss responsibility for all countries in the managed region or area. In terms of regional sales priorities, PUMA will continue to leverage its strengths in key growth markets in EEMEA, Asia and Latin America such as India, China and Mexico to ensure stable sales growth for PUMA. In Europe and North America we have been gaining considerable momentum. Our strategic focus in both regions is to build on these recent accomplishments and our improved sell-through to continue repositioning PUMA and increase our presence in quality wholesale distribution channels.
PUMA distributes its products via three different distribution channels: Wholesale, PUMA-owned and operated retail stores, and eCommerce. Wholesale accounted for 78.1% of our net sales in 2016 and has remained the principal sales channel of the PUMA Group. PUMA expects the highest growth rate for the eCommerce distribution channel. Our focus on Wholesale will be to continue promoting joint product and marketing programmes together with key accounts and to build on the positive momentum of 2016. These strategic measures and the recent surge in sell-through rates are to increase the business share of our most important accounts in PUMA’s total wholesale net sales and hence our net sales quality. In Retail, PUMA has continued to roll the Forever Faster store design at 70 locations worldwide in the end of 2016. The new and refurbished stores enhance our position in marketing and story-telling and they illustrate our product technologies and strengthen PUMA’s positioning as a sports brand. Where comparable, our refurbished stores report a 10 to 20 percent improvement in terms of net sales. PUMA will continue to open new stores in strategic growth cities, with emphasis on driving traffic into and improving the sales productivity of our owned & operated retail stores. In 2017, we will further launch a new store design for our factory outlet stores to create a better environment for PUMA to tell a powerful brand story and increase product sales.
Product Sales Mix
PUMA sells and markets footwear, apparel and accessories in categories such as Football, Running and Training, Golf, Motorsport and Sportstyle. With a heritage of designing shoes for more than 65 years, Footwear is and will be the foundation of PUMA’s business and its key strategic priority, having generated 45 percent of net sales in 2016. In line with our mission to become “The Fastest Sports Brand in the World”, we will continue to leverage our clear positioning in sports to sell performance and sports-inspired lifestyle products.
Improvement of our Distribution Quality
Strong relationships with our main retail partners are a key building block in ensuring the commercial success of our products. Our strong partnership with Foot Locker in North America is a good example. For several years now, we have rolled out our joint retail concept, “PUMA Lab”. Not only has our business in the PUMA Lab stores accelerated, but we also benefit from positive spillovers to other Foot Locker locations and other banners of the Foot Locker Retail, Inc. The latest highlight has been the outstanding performance of our women’s line at Foot Locker’s Six:02 women-only stores, where PUMA sales more than doubled. PUMA has been at the top of the best-selling brands in Six:02’s Manhattan store since it opened in September. PUMA is also gaining traction among other customers in the United States. Business with athletic specialty chains has more than doubled in North America, while our shoe chain business has recorded double-digit growth. Our wholesale business in Europe reported double-digit growth in 2016 as a result of improved product line-ups and brand heat, driven by a more disciplined management of distribution channels and product lifecycles. In China, the vast majority of our business is generated by franchise partners such as Belle and the YY Group, who opened around 200 additional PUMA stores in 2016. We use PUMA flagship stores to enhance our brand visibility and to set benchmarks for our franchise partners to improve store productivity. Driven by strong market trends, eCommerce and Football are contributing to our high-pace growth in China. Across geographies, we can report strong momentum driven by improved product line-ups and brand heat and by our reliable partnerships with key retailers. We will continue to foster these relationships with our most important accounts in 2017.