The strategy mapped out by Puma for profit in Brazil

São Paulo-Fabio Espejo, President Puma in Brazil, promises for this year a feat that local operation of the company has not seen for a long time: profit.
The German sportswear manufacturer is ending a cycle of restructuring in the country and begin to reap the rewards. Last year, driven by the Olympics, the partner product sales grew 10% and own brand online store, advanced 70%.
The idea is to double the size of e-commerce in 2017, open two outlets in São Paulo (the company already has four stores and a farm operated by others) and monetize the business.
Espejo took command of the subsidiary in August 2014, in the middle of a global transition of Puma, soon after the World Cup, key event for the sector.
"I came with the brazilian economy booming and the dollar to 2.40 reals, a very different scenario of the current" comments.
Long career in the sports industry, he left the Chair of Director of finance in Argentina Alpargatas to take on the challenge of repositioning the rival here.
"The brand was very strong in Brazil, but the company had a management problem," he says. Inventories were too high, stagnant revenues and the mix of products and inadequate communication.
Change General
The first thing that Espejo was the team moved. He took to the Puma executives who had already headed reorganizations on competitors in the areas of product, logistics, finance and marketing, for example.
To motivate the people of 180 staff, instituted a policy of flexible hours, short days on Fridays and incentives for sports.
"It''s not easy to make a game changer if you don''t have a different posture," says.
The second was dry. The company renegotiated rents and contracts with distributors and reduced payroll (the Legal Department was outsourced).
At the same time, lowered inventory, invested in process improvement and relocated investments in the areas of product support, sales and marketing.
In 2016, it was time to adapt better to taste products of Brazilians (about 40% of the portfolio is produced nationally), strengthen the communications materials at points of sale and change the layout of the online store. Also opened two stock tips.
"We launched two collections per year. Have outlet is important to drain what doesn''t sell, "says Espejo. Puma''s who collects the products that do not have exit along to retailers and leads to the promotion points.
"The stock is my stock. It''s no use just I sell to him, have to worry about what is spinning, "he says.
The result of such a change, according to the Executive, was that in the last three years, sales have increased, the company''s operating profit (Ebit) improved by 50% and the retail arm (the virtual showcase shops) began to close in blue.
The challenge now is to make profitable the distribution part-what does he expect to until December.
The company does not open the local balance. In the world, however, the receipts totaled 3.62 billion euros in 2016, a jump of 7% compared to the previous year.
The operating profit was 127,600,000 reals, compared with 96,300,000 euros in 2015, an increase of 32%. Already the net profit was EUR 62,400,000, 68% above the 37,100,000 euros accumulated in 2015.
Its gross margin fell from 45.5% to 45.7%, indicating a small market gain.
Espejo does not reveal how much the company spent to pay for projects that have transformed the business, just says that "a reasonable amount of euros" has been invested in recent years.
Accurate marketing and profit
One of the big bets of Puma Brazil for this year is electronic commerce. The internet shop is operated by a third party, but is the Puma that decides which items will be sold on it and strategies.
In the coming months, the showcase will win a new platform. In 2016, web sales corresponded to 2% of the company''s revenue. The expectation is that, this year, the slice is between 8 and 10%.
The profit distribution arm, believes Espejo, will come with heavy bet on marketing and partnerships.
The company, which is in the country since 2002, wants to expand the range of products sold in retailers such as Artwalk and Centaur-it offer about of 1,200 articles on 1,000 outlets, but half of that portfolio is in the hands of the 50 largest customers.
Also focus on actions on social networks (Brazil is the second country where the company has more followers on these platforms) and in a deal with luxury SETTCoaching Academy, in São Paulo. Puma sponsors coaches '' uniforms in Exchange for disclosure, and events.
"There are a lot of bloggers, influenciadoras. The idea is to awaken the desire for brand, "explains Fabio Espejo.
Along the same lines, the company invests heavily in marketing around the world. Have as ambassadors globally athletes like Usain Bolt, Lewis Hamilton and artists like Rihanna and Cara Delevingne.
The Mission of these personalities is to convince consumers that the products of Puma have casual design, but also technology and innovation.
"You don''t have to take the Academy out tennis. But the performance of a Cougar should not at all for the competitors. We need to communicate better, "says Espejo.
He is confident that the results of the last year will be exceeded this year, although he did not believe a significant recovery of the economy in the short term.
"We made adjustments before the crisis. Other big brands took, had to close stores. I''m optimistic that my business is good, "he said.
The Iemi consulting market intelligence expects sales of sports fashion grow 1.7% this year. Last year, the segment has retreated 2.6 percent, when considered inflation.