How Third Bridge supported idea generation at a global hedge fund: Sportswear category

  • Public Equity
  • Consumer
  • Europe

A USD 50bn+ global hedge fund was using Third Bridge’s integrated solutions for idea generation on large-cap global sportswear stocks.

We try to read everything that has come out in the last three years. Navigating up and down value chains with Maps helps us to discover unique content to form a thesis.

Analyst, Global Hedge Fund

Using Third Bridge

The client downloaded over 15 Forum Interviews, conducted across three continents, discussing supply chain delays, the competitive landscape and cost challenges.

Third Bridge’s Connections team also identified hundreds of industry experts for private consultations to understand operating margin expansion opportunities and pricing dynamics.

Developing a new investment thesis

Interviews with former executives of major footwear brands discussing latest channel trends provided the foundation for a new investment thesis on Puma and Adidas. The client discovered that channel mix is crucial and that third-party sales were driving Puma’s growth. This was particularly true regarding its partnership with Amazon, which benefited from COVID-19 tailwinds.

In contrast, Nike and Adidas had been increasing their D2C sales since 2019 and as a consequence of becoming over-distributed started to withdraw from some third-party wholesalers. Puma had in turn gained a competitive advantage, as the company was able to claim the wholesale shelf space left by its rivals.

Key outcome for the client

This was the first time that Puma’s supplier-first approach vs Nike and Adidas’ retail-focus strategy had surfaced, resulting in the client taking a long Puma/short Adidas position.

Keen to find out more?
Get a free Third Bridge demo from one of our dedicated team. They can discuss your requirements and how our integrated solutions can fuel your research with high-quality, relevant, timely insights to make smarter and faster investment decisions.

Request a demo here.