As the trade battle between China and the United States heats up, Puma is increasingly purchasing from suppliers in nations like Vietnam and Indonesia for the US market, according to CEO Arne Freundt.
The CEO of the German sportswear company disclosed that, as tensions between the two nations increase, it is now sourcing about 10 per cent of the footwear imports for the US market from China, a substantial drop from its previous 30 per cent. In the midst of escalating trade tensions between the US and China, Puma has implemented a number of adjustments since Donald Trump was elected president, including new export limitations and taxes.
The Puma CEO stressed that agility is essential for success because trade uncertainty affects customer behaviour. He met with staff this week to gauge US consumer sentiment, research competitors, and make sure sourcing teams have access to firsthand market information.
According to Freundt, Puma’s broad sourcing strategy—which includes sourcing from nations like Vietnam and Indonesia—is advantageous because rivals would find it difficult to adjust as fast and might even need to raise prices. But for the last few months, Pumas has had some difficulties.
Demand for essential products like Suede XL skating shoes and Palermo trainers slowed in November, especially in China and Latin America, where warehouse restrictions exacerbated pressure, despite the company’s solid Q3 performance and post-election reaffirmation of its 2024 prediction. The overall decline in consumer demand was noticeable even though product demand was high in October.
Shares of Puma fell more than they have in more than 20 years after the company shocked investors in January with lower-than-expected Q4 earnings, missing projections and postponing a crucial profitability goal by two years.
