Sportswear firm Puma is pulling out of the sailing market to concentrate on other sports, such as soccer and running, leaving America’s Cup champion Oracle Team USA looking for a new sponsor following the 2013 race.
The German company reported a 70 percent drop in annual profit Thursday and is going through its largest reorganization in 20 years to restore business and get its products back in fashion in the United States, Europe and China, according to a Reuters report.
The group is closing stores and cutting product lines and last month it said it will stop sponsoring rugby union football.
Outgoing chief executive Franz Koch, leaving as part of a management shake-up instigated by PPR, Puma's 82 percent owner, told journalists Thursday that it will take "some time" before the restructuring brings visible success, Reuters reported.
Sales this year are expected to remain on a level with 2012's total of 3.27 billion euros. Net earnings, which dropped to 70.2 million euros from 230 million in 2011, are expected to improve significantly this year, Koch said.
Earnings in the final quarter were hit by a cost of 98 million euros related to a payout in Spain to reclaim trademark rights from a former license holder and the costs of closing Puma’s operations in Greece, Cyprus and Bulgaria. The company will continue to distribute products to those countries.
Puma already has said it wants to focus more on soccer and running and will stop sponsoring Oracle Team USA, current holder of the America’s Cup, after the 2013 season. The team wears race gear supplied by Puma, and the company's jumping cat logo can be seen on the sails.
Puma entered a team twice in the Volvo Ocean Race, finishing in third place in the final last July, but the company will not enter another team.
Brands pay upwards of 10 million euros ($13 million) a year to sponsor the major sailing teams, Reuters reported, attributing the figures to the sports market research company Repucom.
Koch declined to provide figures, saying only that Puma had invested a "significant amount."
Repucom said the sport is interesting to higher-end premium brands such as Prada because about 19 percent of the 331 million sailing enthusiasts worldwide are thought to be high earners.