The Catalyst

How open-source design (and a big shot of fashion) saved Puma, and invented an industry.

Struggling to articulate his personal aesthetic, the best Jochen Zeitz seems to be able to do is, not Karl Lagerfeld: "I'm more the person for clean design," says the CEO of Puma AG, in a Teutonic staccato. "I think my taste is very straightforward, as opposed to a Lagerfeld--over the top."

Asked if he considers himself a designer, or even thinks like one, Zeitz shoots back, "No." Yet since 1993, when he took over the now 58-year-old feline brand (at age 30, when he was the youngest chairman of the German Stock Exchange), he has harnessed design to give it still another life.

At the time, Puma North America was on the verge of bankruptcy after its parent's eight consecutive years of losses; it had little cash and even less cachet in an industry of heavyweights such as Nike, Adidas, and Reebok. So instead of trying to one-up the peddlers of performance-enhancing gear, Zeitz inverted industry priorities, deemphasizing sport in favor of more fashion-driven thinking: color, line, and style.

Puma has since become the fourth-largest athletic apparel company in the world, a transformation that testifies to Zeitz's vision and willingness to roll the dice. After spending several years kicking the company's bad habits--by slashing production costs and regaining control of U.S. distribution, among other things--he decided to put an unrestrained 21-year-old skateboarder named Antonio Bertone in charge of a new division called "sport lifestyle" to incubate experimental fashion projects. Bertone and Puma's collaboration with Jil Sander in 1998 was a symbolic turning point, with the German designer taking visual elements of Puma's classic '60s soccer cleat and retooling them with suedes and edgy colors.

Zeitz's move was greeted with plenty of industry skepticism. Sports retailers scoffed that he'd kill the brand; consumers couldn't imagine Puma as anything other than Pelé's famous soccer shoe. And the runway was certainly the last thing on the minds of employees based in the tiny, insular German sneaker town of Herzogenaurach (home to both Puma and Adidas, which were started by two brothers and remain bitter rivals). But Zeitz got the last laugh when fashionistas suddenly began piling onto waiting lists for Sander's shoe. "It took a while--and from my perspective, a lot of energy--to protect this new little child [the lifestyle group] of Puma from getting killed," says Zeitz. "Eventually, it became the entire company."

Now the retro sneaker that used to be found only in the Foot Lockers of the world is a fixture in high-end department stores like Barneys. It has its own glam boutique in Manhattan's Meatpacking District, and there are 74 stores around the world. And while Puma today holds about 6% of the global sports-apparel market, it has had nine consecutive years of double-digit growth--with annual sales now at $2.3 billion--and enjoys the highest margins among its competitors.

Zeitz, meanwhile, has gone on to turn his company into an open-source design playground. He has enlisted outside designers--from France's Xuly Bet to Japan's Yasuhiro Mihara--to produce an ever-expanding list of product reincarnations, pioneering a new sports-lifestyle category that fuses fashion and performance. "Basically, everyone said we were crazy," recalls Zeitz. "But if you want to change the industry and do something completely new and innovate, research is a bad tool because all you will get fed back is perception today and not tomorrow."

Still, he has no illusions about his mission. "We're not a museum," he intones. "We're there to sell product." The decision to rotate a cast of brand-name designers with disparate tastes through the company, he says, forces Puma and its own in-house designers to reimagine their work from multiple points of view: "Sometimes you may not always like it--Philippe Starck is Philippe Starck and [Alexander] McQueen is McQueen," Zeitz says, referring to two of the high-profile designers with lines at Puma. "But they come at it from completely different angles, and I think that's what helps Puma constantly keep an open mind."

"We're not a museum," says Zeitz of Puma's mission. "We're here to sell product."

He is forever pushing Puma into new territory. From a driving shoe cocreated with BMW's Mini to the Mostro--a Velcroed form-fitting sneaker with a completely new silhouette and closure system that continues to be one of Puma's most-popular products seven years after its introduction. And in 2002, Bertone, now global director of brand management in Boston, went so far as to buy 600 pounds of vintage clothing and have them reconstructed into a limited-edition line called Thrift. Several iterations later, the idea has evolved into Puma's latest venture, Mongolian Shoe BBQ, its playful online version of sneaker customization that debuted several months ago. "I always describe working for Puma as, 'They give you all the rope in the world to hang yourself with,'" chuckles Bertone. "Your job? Don't hang yourself."

Now Zeitz is playing outside the footwear category altogether. In 2006, Puma introduced 24 Hour Tubism, an aluminum-cased wardrobe system for business travelers. The previous year, it rolled out an urban bike design, done in collaboration with Biomega, a Danish bike company, and Vexed Generation, a London design team. The crew had decided the bike would only be worth doing if they could create something that had never been built--and then they developed the first "unstealable" bike (the lock is actually part of its frame, and the entire structure is compromised if it's broken). Puma says the foldable bike has been one of its hot sellers, and New York's MoMA featured it in its 2005 "Safe" exhibit. "I've seen many of those brand collaborations where basically the only point is sticking on a Gucci sticker," says Jens Martin Skibsted, Biomega's founder. "That degrades good brands." But Puma, he adds, "is helping to shape who I am as a designer."

Just because Zeitz invented the category doesn't mean he's guaranteed his current place at the top of it. In recent years, Converse has teamed up with John Varvatos, Vans with Marc Jacobs, and Adidas just extended its deal with Stella McCartney through 2010. And while Nike is relatively late to the "low performance" game, it got a good reception for its customizable Nike iD line. "First in is not always the last out," cautions Marshal Cohen, chief fashion footwear analyst at NPD Group. "Competing with Kenneth Cole is one thing. Competing with Nike is another." But competing with both doesn't sound like a bad place to be.

Danielle Sacks (dsacks@fastcompany.com) is a Fast Company staff writer.

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