Puma to cut costs as profits slump
SPORTS APPAREL maker Puma said it was looking at more cost-cutting measures as it reported third-quarter results below expectations, hit by a slowdown in Europe and China as well as restructuring costs.
Slowing consumer spending in Europe has already prompted profit warnings from car suppliers to luxury handbag makers and food retailers. Puma, a distant third in the sporting goods industry behind Nike and Adidas, had warned over the summer that 2012 profit would fall far below last year’s level on weak spending in Europe, its biggest market.
Sales in the EMEA region dropped 3.4 per cent in the third quarter to €396.7 million, said Puma, whose shoes are worn by sprinter Usain Bolt and soccer player Cesc Fabregas.
The Germany-based group said overall third-quarter sales rose 6 per cent to €892.2 million and net profit crashed 85 per cent to €12.2 million. That included restructuring costs of €80 million in the quarter. Puma is reducing its product range by 30 per cent, trimming organisational structures, closing 80 loss-making stores and scrapping non-lucrative sponsorship deals. – (Reuters)