Key Highlights–
- Puma slashes 900 jobs as sales drop 15% and inventory swells 17%.
- Tariffs and a weak dollar deepen cost pressures across supply chains.
- The layoffs signal a broader shift toward capital discipline in global retail.
The German sportswear giant Puma (PUMG.DE) is cutting 900 jobs as part of a sweeping turnaround plan under new CEO Arthur Hoeld, marking a pivotal shift not just for the brand but for the wider sportswear supply chain.
Puma’s Reset Signals Deeper Strain in Sportswear Supply Chains
The layoffs are Puma’s second round of cuts this year, coming amid a 15% sales decline and a 17% surge in inventory, exposing how sluggish demand and tariff pressures are rippling through the apparel industry’s global networks.
Hoeld, who joined from Adidas in July, said Puma had become “too commercial, overexposed in the wrong channels, with too many discounts.” His reset plan involves selling less to off-price retailers in the U.S., scaling down its product range, and focusing on direct-to-consumer (D2C) sales, a move designed to restore pricing power and working-capital efficiency.
Inventory Bloat: The Hidden Cost Behind the Cuts
At the heart of Puma’s layoffs lies a simple financial truth: inventory is cash trapped in warehouses. Puma’s stockpiles ballooned to €2.12 billion ($2.47 billion) in the third quarter as it reclaimed unsold goods from retailers. The company now expects inventory levels to normalize only by the end of 2026.
Analysts say the layoffs reflect a working-capital correction that’s spreading across global retail. When sales slow, excess inventory ties up liquidity, forcing companies to cut overheads, delay innovation, and reallocate resources to protect margins.
“Puma’s decision isn’t just cost-cutting, it’s a liquidity move,” said a Frankfurt-based retail strategist quoted by Reuters. “The entire apparel sector is chasing cash efficiency after years of overproduction.” Furthermore, this trend mirrors similar inventory and demand imbalances seen at Adidas and VF Corp, signaling that supply-chain recalibration has become a survival strategy and not a choice.
Tariffs, Currency Pressures, and the US Squeeze
Puma’s troubles are amplified by US import tariffs on Asian-sourced products and a weaker dollar, which erodes revenue for euro-reporting firms like Puma and Adidas.
The higher cost of US imports has squeezed margins, while discounting to move excess stock has damaged brand perception. Hoeld’s strategy, limiting markdowns and improving marketing, seeks to rebuild value and differentiate Puma from discount-heavy competitors.
For supply chains, this means shifting sourcing priorities, reducing low-margin wholesale exposure, and adopting leaner production models. As tariffs reshape trade flows, apparel makers are reassessing where and how they manufacture, with ripple effects across suppliers in Vietnam, Bangladesh, and China.
Long Road to Recovery
Despite the overhaul, Puma reaffirmed its guidance for a loss in 2025 and doesn’t expect growth to return until 2027, with 2026 marked as a “transition year.”
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However, investors remain cautious. Puma’s market value has halved since January, and shares fell another 1% after the announcement. Parent shareholder Artemis, which owns 29%, has ruled out selling at current valuations but continues to “consider options,” according to Reuters.
The job cuts, coupled with Hoeld’s strategy to cut SKUs and rebuild pricing power, highlight a broader pivot in retail economics, from growth at all costs to capital efficiency.
Global Retail’s Warning Signal
Puma’s layoffs are more than a restructuring headline; they’re an indication of the tightening economics reshaping global retail. From apparel to electronics, companies are now prioritizing liquidity over expansion, optimizing supply chains, and consolidating product lines to survive an era of slower demand and cost inflation.
The sportswear market, once driven by pandemic-era athleisure booms, now faces oversaturation, higher trade costs, and thinning margins. Puma’s reset is painful but necessary, showing what the new playbook looks like: fewer discounts, leaner inventories, and sharper capital control.
