Anta Sports May Struggle to Repeat Previous Investment Successes With Puma, Analysts Say

(Yicai) Jan. 28 -- Anta Sports Products is to buy a controlling stake in renowned German brand Puma, but the Chinese sportswear maker may struggle to replicate the success it has had with previous overseas investments, according to analysts.Anta will buy a 29 percent stake in Puma for EUR1.5 billion (CNY12.49 billion), making it the largest shareholder, the Fujian province-based company announced yesterday. It will pay EUR35 (CNY291.47) per share in cash, a 62 percent premium on Puma’s closing price in Frankfurt of EUR21.63 on Jan. 26. Puma rose nearly 17 percent the day after the deal was announced.Anta said it hopes to further enhance its position and brand awareness in the global sports products market and thus strengthen its overall international competitiveness. Puma’s business performance has worsened in recent years. Net profit declined 14 percent in 2023, and dropped another 7.6 percent in 2024, its financial records show. Sales last year are expected to have fallen by a double-digit percentage, the firm estimated in its third-quarter financial report. Puma’s competitiveness in China has declined, and Chinese consumers are no longer blindly buying foreign brands, said Zhao Chengfei, a sports chain dealer who owns multiple large retail outlets. It remains to be seen whether Anta can replicate the success it has had in reviving other overseas brands, he told Yicai. Anta has built a large multi-brand group through a series of acquisitions in recent years. Since leading a consortium to acquire Finland's Amer Sports in 2019, the company has successfully revitalized international brands such as Canada's Arc'teryx and France's Salomon. Italian sportswear brand Fila also became profitable after being bought by Anta.The firm reported CNY70 billion (USD10.08 billion) in operating revenue and CNY7.6 billion in net profit for the fourth quarter last year, both up by a low single-digit percentage from a year earlier. The retail sales of its main brand Anta dropped slightly, but the two high-end brands Descente and Kolon Sport jumped 35 percent to 40 percent in the fourth quarter from the same period in 2024. This indicates that although Anta experienced a short-term decline for its main brand, the strong growth of its multi-brand portfolio, especially the high-end brands, provided the group with a defensive buffer, analysts said. Anta has continued searching for a new growth engine, but its rapid expansion also brings integration challenges, they noted.Many major sports events such as the World Cup will be held this year, and Puma’s influence in soccer is second only to Adidas, so acquiring Puma has boosted Anta’s position in the world’s biggest global sports event, Wang Jue, an insider at a listed footwear and apparel company, told Yicai. “It’s still very difficult for Chinese sports companies to gain a foothold in the international soccer market replying on their own brands,” Wang pointed out. “Acquiring other brands is a possible way.”Despite its underperformance, Puma remains the fourth-largest sports enterprise worldwide after Nike, Adidas, and Lululemon. At an earnings conference last year, Chief Executive Arthur Hoeld said Puma was actively promoting its brand rebuilding strategy to concentrate resources in the three core categories of running, football, and training, aiming to regain growth by 2027 and become “one of the top three global sports brands.” Editor: Tom Litting