According to a Reuters report, Puma CEO Bjorn Gulden announced the first-quarter results on April 26, saying that he has formulated an emergency plan for the Sino-US trade war and will move some production lines to other Asian countries if necessary.
Although according to the Puma report, the strong demand generated by China not only helped Puma SE Puma achieve a 34.8% fixed exchange rate sales growth in the Asia-Pacific region in the first quarter, but also the origin of the group's 1/3 of commodities.
However, due to the possibility that US President Trump will announce additional tariffs on Chinese imports worth an additional US $ 100 billion in the next few days, categories such as clothing and footwear will inevitably be affected.
Bjorn Gulden said on the conference call that the Sino-US trade friction "gave the entire sportswear industry a headache" because the US is the industry's largest single market. He revealed that in the past two or three months, the procurement department has been studying alternatives-footwear products exported to the United States will be turned to Vietnam (Puma SE Puma purchases 1/3 products here) and Indonesia, and clothing will be turned to Cambodia and Bangladesh, while This may take 12 months.
However, he added that U.S. tariffs may also mean that Puma must accept lower U.S. profit margins or increase prices, adding: "We are not U.S. market leaders, so of course we will see the role of the market."
In fact, in the past few years, due to factors such as rising labor costs, environmental protection, and changes in industrial policies, China ’s labor-intensive manufacturing capacity has been shifting to Southeast Asia. Bjorn Gulden pointed out that Puma SE Puma suppliers are no exception. Chinese-, Hong Kong-, and Taiwan-funded suppliers have set up factories in China and Southeast Asia, so it is not difficult to adjust the output, but they are still doing nothing. "Every operation is feasible, but this is not something that people are happy to do," he told analysts.
Reprinted from: Lazy Bear Sports
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