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Adidas ‘In Talks’ with Puma CEO as Yeezy Maker Guts Workforce

Adidas AG has confirmed that it is in talks with Bjørn Gulden, CEO of German rival Puma SE, as a potential successor to CEO Kasper Rørsted, who is stepping down from the position next year.

Gulden is leaving his CEO and board posts at Puma at the end of the year, with the company announcing Arne Freundt as chairman and CEO effective Jan. 1, 2023.

Adidas’ official statement came out after German publication Manager Magazin reported early Friday that Gulden would become the new head of Adidas by the end of the year.

An Adidas spokesperson told Sourcing Journal the company doesn’t have more details to share on the succession plan.

Puma did not have additional comment.

“My current contract with Puma ends 31/12/22 and after nine years I have decided not to renew,” said Gulden in a statement. “I have had nine great years with the Puma family, and I am very proud of what we have achieved together…I still have a lot of energy and want to at least continue five to 10 more years in an operational role, which I think would have been too long for Puma. Arne has been working directly with me for nine years, has always been part of setting the strategy and making big decisions and has made a big contribution to Puma’s success. He knows my strengths and weaknesses and I am sure he will do an even better job than me.”

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Freundt has worked for Puma for more than a decade, serving as chief commercial officer since June 2021. In his various positions at the company, he has been responsible for corporate strategy, the global direct-to-consumer business and also served as the general manager of the EMEA region.

Puma's Incoming CEO Arne Freundt
Puma’s Incoming CEO Arne Freundt Puma

“I feel privileged to be given this opportunity by the supervisory board to lead this great company with its fantastic people and take Puma to the next level,” said Freundt in a statement. “Bjørn has been an inspiring leader and I am very thankful for the joint journey.” 

Adidas has been taking blows left and right throughout 2022, most recently in the form of a very public falling out with Yeezy footwear partner Kanye West, now known as Ye, before officially terminating the partnership in late October. While trouble between both parties had been brewing for months as the hip-hop mogul was outwardly critical about Adidas’ handling of the collaboration, the tie-up was severed completely after Ye made a slew of broadly condemned antisemitic remarks.

The Yeezy split is expected to cost Adidas about 250 million euros ($248 million). Morningstar analyst David Swartz estimates the Yeezy brand brings in close to $2 billion in revenue per year.

Adidas supplier undergoes mass layoffs post-Ye split

The turmoil at Adidas is also already having a significant impact on one of it suppliers. Atlanta-area manufacturer Okabashi Brands, which has produced the Yeezy Foam Runner style since 2020, laid off 142 employees, according to a WARN notice filed with the state of Georgia. The footwear producer now employs just 58.

The layoffs are effective immediately, Okabashi said in a statement. Laid-off workers will receive severance and extended health-care coverage.

Okabashi is coordinating with local government agencies and manufacturers to provide support and alternative employment opportunities for the impacted team members. 

“As one of the remaining 1 percent of U.S. footwear manufacturers, Okabashi will continue production of its own branded products and is pursuing other partnership opportunities to leverage its domestic manufacturing capacity and know-how,” a company spokesperson said in a statement.

Okabashi has been manufacturing sandals in its Buford, Ga. factory since 1984. 

Adidas and Puma appear to trend in different directions

Adidas’ issues go beyond the current near-term hits from the Ye breakup. The company incurred more than $300 million for exiting Russia and has seen its China business sputter to the point where it has cut its full-year sales and earnings guidance multiple times. Preliminary third-quarter sales for Adidas increased 11 percent to 6.41 billion euros ($6.27 billion) in the third quarter, but net income was 179 million euros ($175.1 million), down from 2021’s 479 million euros ($468.6 million).

Puma has navigated the external environment better, with its own third-quarter sales boosting 23.9 percent to 2.35 billion euros ($2.33 billion), on net income that ticked up 1.8 percent to 146.4 million euros ($145 million) from 143.8 million euros ($142.4 million). Unlike Adidas, Puma reiterated its guidance in October, three months after raising its revenue guidance for the full year. The company expects currency-adjusted sales growth of approximately 15 percent and earnings before interest and taxes (EBIT) between 600 million and 700 million euros ($594 million to $693 million) for 2022.

“The past years have been marked by several external factors that disrupted our business significantly,” Rørsted said in a statement in August. “It required huge efforts to master these challenges. This is why enabling a restart in 2023 is the right thing to do—both for the company and me personally.”

Rørsted has been the CEO of Adidas since 2016, and will remain in the position until a new CEO officially takes the reins.

Adidas reports its official third quarter earnings on Wednesday.