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Puma
March 2014

Puma’s new MD

upbeat for 2014

After preparing for three years, the transition from Ronald Rink to Luke Barrett-Smith as Puma SA MD was seamless.

The leadership change at Puma SA is probably the smoothest the industry has seen. They have, after all, been preparing for it for the past three years. Luke Barrett-Smith started the new year with the title MD — but he has been MD Designate since July last year and has been learning the ropes from retired MD Ronald Rink since March 2011.

That was when Rink knew that he would be stepping down at the end of 2013 from running the Puma subsidiary in South Africa, which he started in 2001. “For the past six months Luke has been running the company and making all decisions,” Rink said at the end of last year. If anything, says Rink, Barrett-Smith will now have an easier time: for the past six months he also had the responsibility of being national sales director, a work burden new sales director, Derick Freemantle, will take over. There will, therefore, be no surprise changes in direction or policy.

Sustainability

“We don’t compromise on ethics and we don’t compromise on sustainability,” says Rink. “Sustainability is not a lofty ideal, we live it in this company. Sustainability and ethics are not just key issues for Puma, it’s key to life and how we live our lives.”

They run as close as possible to a paperless office and have reduced their paper use by more than 60% over the past two years — while growing the company by more than 30%. They haven’t used paper invoices or statements for more than a year. ID access to track the usage of printers and scanners not only counts the paper use of employees, it also ensures less wastage from double or overprints. Even the storage of files have gone virtual.

South African focus

Following a tough 2013, Barrett-Smith is looking forward to building on their strengths in 2014. “The past year we’ve faced some of the most challenging times in the thirteen years that Ron and I had been working together. I think it’s the unpredictability ... you never know if there will be a strike tomorrow.” They do, however, have a strong base.

“We’ve had huge growth,” says Rink, who believes one of their strengths is that all the original management team members are still with the company. “We have one of the strongest teams in the country, our balance sheet must be one of the strongest in the country.”

With the World Cup in June, soccer will be a main priority for 2014. Puma’s signing of English PSL league-toppers Arsenal, will also generate welcome replica shirt sales. Eight of the 32 World Cup teams will be playing in Puma — four of the five African teams.

Although their focus for the first half of 2014 will be soccer, and running will remain strong, they are very happy with their position in rugby from a sponsorship perspective and are in the process of consolidating rugby into a central hub.

“The Bulls are, without question, one of the strongest rugby franchises in the world, outside national franchises. We have a wonderful relationship with them, as with the Cheetahs and the Southern Kings. “ Motor racing, a focus area for the brand since 1978, is still a significant part of their business. The sale of Ferrari, BMW, Mini, etc. lifestyle product is doing well, says Barrett-Smith, with South Africans considering the branded items as very fashionable, whether they drive the vehicle, or not.

They are also involved with extreme sports like skateboarding, rallying and the X-games. The Social Club they ran in Johannesburg was such a success that they extended it six months beyond the original timeline. There was a disappointed fan base when they eventually closed, says Barrett-Smith, but they will be replacing it with something new. “It gave us the opportunity to interact with our consumers, and to understand them.”

At the club, close to their store in the trendy Braamfontein, young people got the chance to join in all kinds of unusual activities — like playing table tennis with their phones.

Performance year for Puma

Worldwide, 2014 will be a big year for Puma as new CEO Björn Gulden will introduce a manifesto in July, which will indicate a new direction for the brand. When he was appointed in July 2013, Gulden said his priority would be to improve the company’s performance by focusing on their roots in football and athletics, rather than concentrating on fashion-led sports lifestyle.

A former pro footballer, the Norwegian businessman has nearly 20 years’ experience in the European sporting goods and footwear distribution and retail industries, with previous management experience at, among others, Helly Hansen and adidas. He was appointed after a 70% drop in profits resulted in a reshuffle of Puma’s top management.

Although Puma still has one of the strongest balance sheets in the industry, the shareholders expect Gulden to revitalise the brand and a strong focus on performance can therefore be expected, says Rink. “Gulden believes that lifestyle comes from performance,” adds Barrett-Smith. He mentions the shoes that athletes like Boris Becker wore while delivering top performances, which would today be considered to be fashion lifestyle shoes.

“The brand’s credibility comes from there. We’ll keep our focus on performance, without jeapardizing lifestyle.” The fact that certain performance styles became so popular amongst a large number of lifestyle buyers, didn’t detract from their performance heritage, they argue. “In 1999 we brought out styles, like the Mostro, which revolutionised the image of a sports brand,” says Barrett-Smith.

In South Africa, Puma had always been about performance first, although consumers might have considered them a lifestyle brand. In the World Cup the teams who’ll be playing in Puma will be seen by 4.8-bn viewers, he predicts. “This exposure will show we are definitely a serious performance brand.”

But, with a shareholder like Kering, owner of top fashion brands like Gucci, Saint Laurent, Stella McCartney, etc., Puma will be exposed to many more fashion lifestyle co-labs — and it would only be natural to make the most of this benefit.

Winning awards

Over the past thirteen years, Puma SA has won many awards — one of the most cherished the Puma Subsidiary of the Year award they won when they were only three years old ... an unprecedented achievement. “It was for market penetration, profitability, market share, etc.” says Rink. “We win awards all the time,” he adds nonchalantly.

Their most famous award was the Mickey Mouse hat they won for beating the Puma Holland team in an impromptu swimming race in a fountain during their sales conference at Disney World. With an Olympic swimmer and a navy seal on their team, the Dutch were confident that they would win the challenge — and that the South Africans would end up paying the forfeit of 400 liters of beer for everybody still awake at that time of the morning.

The South African team of Rink, Brett Bellinger and Alex Hulley (who was pulled out of bed) were about half a length ahead when Barrett-Smith, a champion lifesaver, had to swim the last length against the Dutch Olympic swimmer. He decided to give her a sporting chance and waited until she was 5 seconds ahead ... and still beat her by half a length.

After a memorable party, they were awarded the Mickey Mouse hat the next morning ... and Barrett-Smith promptly thanked Puma Denmark for swimming against them. No wonder Rink says: “We’ve had a helluva lot of fun along the way.”

Ronald Rink and Puma come a long way

Ronald Rink’s history with Puma dates back 34 years to the early 1980’s, when he was GM of Jag Sports, owned by Roy Eckstein, that was selling Puma in South Africa. After a disagreement with Eckstein, he moved to Canada, where he started a Hi-Tec distributorship, which he sold to the company after ten years.

After a short stint at Hi-Tec International head-office, he returned to Puma’s international division, which was essentially the EMEA region. When the South African Puma distributor, Buccaneer, went into liquidation in 1998, he had to find a new distributor, who was Eckstein, who subsequently also bought the South African rights for Reebok.

Rink opened the Puma subsidiary in South Africa in 2001, which he had been running for the past thirteen years. He sold his shares in the company a few years ago and after renewing his contract several times, Puma eventually said that his contract would be renewed for a final time until the end of 2013.

“Ron has been my mentor,” says Barrett-Smith. “With Ron you know you are in the presence of an ethical individual who doesn’t compromise on what he stands for. In business, those are the things you look up to. “Over the years we’ve become friends ... how would you summarise something that is so big (his influence) in a few words? I don’t think I could.”

Born in Bulawayo, Rink was schooled at Durban High, matriculated at Westerford High in Cape Town and thereafter graduated from the University of Cape Town. He’s an avid tennis player and top surfer. “I’ll surf, go to the bush, spend time in Zimbabwe on the Zambezi ... I’ll get involved in something, but I will not be working nine to six,” are his future plans.

While he hopes that he’ll still be invited to the Puma rugby box and the odd party Rink says he will not be coming back to the office. “The last thing Luke’ll need is me looking over his shoulder and telling him what I would do. When I’m gone, I’m gone.”

But, he will miss the Puma family. “It’s a life. It’s a family.”

A natural choice

Luke Barrett-Smith, who started his working career in hotel management in Johannesburg, joined the sports industry when he wanted to return to Cape Town. His father, Mr Speedo Paul Barrett-Smith, first employed him in the factory “to understand the brand from grassroots, and then I had the opportunity to join the agency as agent.”

He also got the Puma agency in 1999, and in 2002 Ronald Rink offered him the position of Puma sales director. He became part of a small management team of eight – all of them still with the company.

Barrett-Smith was a natural choice as his successor, says Rink. “He has the background, he understands the entire business, he’s got the passion, he’s got the knowledge, he’s got customer relationships and he’s got the relationship with our operational side.”

He had been in the succession plan as early as 2005 – but was only made aware of it in 2011, says Rink.

Barrett-Smith has WP colours for lifesaving and In 1996 he came 6th in the World Championships held in Durban.


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