Luxury group, Kering, is getting out of the sports lifestyle business as it plans to spin off the German sportswear label Puma to its shareholders, part of the company’s move to focus purely on its luxury brands.

Kering, the owner of high fashion labels such as Gucci, Saint Laurent and Alexander McQueen, will distribute 70 per cent of total Puma shares to its investors, leaving it with only a 16 per cent stake from 86 per cent.

Artemis, which holds 40.9 per cent stake in the French conglomerate, will become a long-term strategic shareholder of Puma with an ownership of about 29 per cent. Puma’s free float would be increased to approximately 55 per cent.

The deal comes after a recent turnaround of the sportswear label, which has struggled for years following the French company’s purchase. Kering first acquired a majority stake in Puma in 2007 for €5.3 billion as part of a move into the athletics and lifestyle arena.

According to Kering, it has long wanted to focus purely on its high margin luxury business where it rivals larger groups such as French conglomerate LVMH.

“The contemplated distribution of Puma shares to our shareholders would be a significant milestone in the history of the group,” said François-Henri Pinault, chairman and CEO of Kering. “Kering would dedicate itself entirely to the development of its Luxury Houses, whose enduring appeal, built on creative audacity and innovativeness, will allow us to continue to gain market share and create value.”

Pinault said the operation would enable their shareholders to directly benefit from Puma’s future value creation.

“We are proud to have supported the turnaround of Puma, which now has unrivalled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth, led by its talented and passionate management team,” Pinault said.

Kering announced it will immediately initiate the information and, as the case may be, consultation processes with the relevant works councils’ representatives in accordance with applicable laws.  

Final terms of the distribution in kind of Puma shares to Kering shareholders are under review and will be submitted to the vote of Kering shareholders at the annual general meeting on April 26, 2018.

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