Puma’s Former CEO Could Be ‘Game-Changing’ Hire for Adidas, Analysts Say

As Adidas prepares to onboard a new CEO next year, one likely candidate is already making analysts and market watchers optimistic.

Adidas on Friday said it was in talks with former Puma CEO Bjørn Gulden as a potential successor to current CEO Kasper Rorsted, after Puma announced the same day that the chief executive would leave his role at the end of the year and be replaced by 11-year company veteran Arne Freundt. Gulden assumed the CEO role at Puma in 2013 and said he has decided not to renew his contract.

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Shares of Adidas were up 21% on Friday following the announcement, indicating a positive reaction to the potential new successor. Analysts were also upbeat about Gulden’s potential to right-size Adidas’ business as it grapples with the end of its Yeezy partnership, a slowdown in China and other challenges in the current retail environment.

In a Monday note to investors, Cowen analyst John Kernan sees Gulden’s potential arrival as a “win for stakeholders,” though likely a lofty task for Gulden, who would be faced with handling the end of the Adidas Yeezy partnership, which brought in an estimated 10% of the total revenues for Adidas.

While at Puma, Gulden helped lift the company’s annual sales by € 5.3 billion from fiscal year 2014 through 2022, Kernan wrote.

Baird Equity Research analyst Jonathan Komp also praised the move in a note and said that “Gulden would be a very strong hire for Adidas” due to his sizable industry experience and “very strong track record at Puma.”

He described the potential hiring as a “game-changing development for the company and investor sentiment.”

Both Komp and Kernan noted Puma’s recent strength in performance basketball, running and outdoor, as well as in the fashion and lifestyle categories. In 2018, Puma named Jay-Z as president of basketball operations following its re-entry into the category.

“We think Gulden potentially could help Adidas to refine its current brand/product positioning and go to market strategies on a more immediate basis, while building on key progress made by the company under Kasper Rorsted in the areas of aligning the global infrastructure and focusing on direct/digital,” Komp wrote.

While analysts agree gaining Gulden could be a win for Adidas, losing him could have the opposite effect on Puma.

“This is negative for Puma, given Bjorn Gulden’s material impact and contribution to the business during his tenure,” wrote RBC analyst Piral Dadhania in a Friday note.

However, Dadhania added that Puma’s business momentum is likely to remain strong in the near-term as the company carries out Gulden’s strategic plan.

This recent CEO shakeup is the latest to occur in the athletic footwear industry. In September, Foot Locker Inc. CEO Dick Johnson stepped down and was replaced by former executive chair and CEO of Ulta Beauty Mary Dillon. And in June, Under Armour president and CEO Patrik Frisk stepped down from his role.

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