These Shoes Don’t Fit: Gucci Parent Returns Puma To Shareholders

Gucci parent Kering is returning its ill-fitting Pumas. The French company’s plan to give up control of Puma SE, focusing solely on luxury and catwalk brands like Stella McCartney and Saint Laurent, sent the German sportswear outfitter plummeting 16 percent in early Frankfurt trading. The fall was its worst since September 2001. The plan, under which Kering will distribute to its investors 70 percent of the shares of Puma, will leave Kering founder Francois Pinault’s holding company Artemis with about 29 percent of Puma. Kering fell as much as 2.3 percent in Paris after earlier rising as much as 1.6 percent. Kering’s decision disappointed some Puma investors who had hoped that the French company would find a buyer willing to pay a premium for the shares. “This exit scenario is not the best one for Puma’s minority shareholders,” Cedric Lecasble, an analyst at Raymond James in Paris, wrote in a report. “A straightforward disposal of Puma at a premium might have been partly priced in by the market.” Also, Kering shareholders may decide to sell the Puma shares they receive in the spinoff, pressuring the stock in the short term, he said. Read more at Bloomberg.