October 11, 2018 / 3:08 PM / 10 days ago

RPT-Puma commemorates 'black power' salute in U.S. market push

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* Puma marks 50 years since Tommie Smith protest at Olympics

* Nike saw sales rise after ad with Colin Kaepernick

* Puma launches first basketball shoe in more than 20 years

* Basketball seen helping lift Puma's U.S. sales, margins

* Q3 figures due on Oct. 25

By Emma Thomasson

BERLIN, Oct 11 (Reuters) - Puma is launching a campaign to mark the 50th anniversary of U.S. sprinter Tommie Smith's black-gloved salute at the 1968 Olympics, shortly after rival Nike scored a hit with an ad featuring a modern-day activist for racial equality.

Nike saw a jump in sales after its advertisement with American footballer Colin Kaepernick, who began kneeling during the U.S. national anthem at NFL games in 2016 to protest against police shootings of unarmed black men - a gesture that has drawn the ire of President Donald Trump.

Puma's #REFORM campaign will see brand ambassadors such as rapper Meek Mill call for people to post images of themselves online with a raised fist to commemorate Smith's silent salute at the Mexico Olympics on Oct. 16, 1968.

The brand is working with rap mogul Jay-Z's Roc Nation on live and social media events to fight racism and sexism, and will match donations to charities such as the American Civil Liberties Union (ACLU), up to $100,000 in total.

Chief Executive Bjorn Gulden said it was a coincidence the anniversary comes soon after the Kaepernick ad, and also shortly after Puma launched its garish orange and black "Clyde Court Disrupt" basketball shoes - marking its return to a sport with close links to the social justice movement.

"We are not trying to make commercial advertising out of this but we think it is good for the brand because it is part of our values," he told Reuters.

Puma has sponsored Smith for more than 50 years. He took a pair of their shoes onto the platform when he did his salute.

Puma is launching a collection of shoes called "Power Through Peace" on Oct. 16, with the proceeds going to charity.

Gulden said Smith was a trailblazer for other athletes like Kaepernick, who could not find a job for the 2017 season and is still without a team. Smith never competed again after 1968, received death threats and struggled to make a living for years.

"What he did then ... was the bravest thing an athlete has ever done when you think about the consequences," Gulden said.

Nike sales jumped after the Kaepernick campaign, but its shares fell late last month when that did not feed through to an increase in the company's full-year forecast.

Both Puma and German rival Adidas have been taking share from Nike in its home market in the last couple of years, helped by the popularity of their retro fashion styles.

RETURN TO BASKETBALL

CEO since 2013, Gulden has rebuilt Puma's flagging business by putting a big focus on soccer and running, while partnerships with celebrities like singers Rihanna and Selena Gomez have revived its popularity among women.

It is now making a drive to widen its appeal in the U.S. market by returning to basketball, naming Jay-Z as its creative director for the sport and signing sponsorships with four top picks in the National Basketball Association (NBA) draft.

"We are doing it not only to sell basketball shoes ... but to sell more soccer shoes, to sell more training and running shoes in America to that kid who then perceives us a performance brand," Gulden said.

"Doing basketball is a real commitment to the American market and a necessary one to be a successful global company in the long-term."

Puma's global marketing head Adam Petrick said basketball had a tradition of supporting social justice, with the NBA backing those who speak out such as Puma athlete Skylar Diggins-Smith, who is fighting unequal pay for female players.

"If we're going to participate in the basketball culture, then we have to participate in all aspects of that," he said.

Puma's core consumers aged between 14 and 30 have shown an increased interest in activism since the financial crisis in 2008, and Trump's election in 2016.

"As a brand we can't be worthy of their business unless we are sensitive to that," Petrick said.

Adidas faced brief boycott calls in May after the rapper Kanye West, who makes its Yeezy brand, described slavery as a choice and praised Trump.

Apart from that, it has not ventured into race politics in the same way as Nike and Puma, although it has scored with consumers with an environmental conscience, who have snapped up its “Parley” shoes made out of recycled ocean plastic.

Matt Powell, a senior adviser with market research firm NPD, said the sports industry was ahead in seeking to align with the values of its consumers, with Puma's rivals like Patagonia and Vans-owner VF Corp putting a focus on sustainability.

He predicts Puma's "fist-raising" campaign will bring only a limited boost to sales but will help the brand longer term.

"The consumer ... wants brands to take visible and vocal stands on social issues," he said. "There are many more people who would respond positively than negatively."

Puma saw second-quarter sales jump almost 19 percent in the United States, after stripping out currency effects. Gulden declined to comment on current trading ahead of third-quarter figures on Oct. 25.

Analysts expect the focus on the United States will help boost profitability, which lags well behind Adidas and Nike, as Puma currently lacks scale and distribution muscle in the world's biggest market for sportswear.

Puma's shares, which dipped in January when former French parent Kering said it would spin off the brand, have since rallied on an upbeat 2018 outlook and are trading up almost a third in the last year.

Reporting by Emma Thomasson; Editing by Mark Potter

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