Adidas acquired Reebok in 2006 and sent the division back to profitability and growth.
Photographer: Albert Urso / Getty Images
Photographer: Albert Urso / Getty Images
As part of the German sportswear maker’s new five-year strategy development, Adidas AG has begun reviewing whether it can sell its effective Reebok brand.
Adidas announced on Monday that it will announce a decision when it presents its new plan on March 10th.
The company acquired Reebok in 2006 for $ 3.8 billion, making a profit in 2018 and growing sales by 2% last year. Bloomberg In October it was reported that Adidas was exploring a sale and could launch a strategic review citing someone familiar with the matter.
Since he joined Adidas in 2016, CEO Caspar Roerstead has made it a priority to fix Reebok’s long-term sluggish performance. Reebok closed less efficient stores, allowed some licenses to expire, reduced sales on the long-unwanted game label, and further reduced costs.
After Reebok finally regained profits in early 2019, Roerstead said it wanted to build sales growth with new footwear such as CrossFit Nano and Fluoride Run. Supervising Adidas and Reebok compares him to being like parents who love their two children equally.
Reebok is long Entrepreneurs inspired by a warning story and the ability to recapture some of its old successes. It became an overnight sensation in the 1980s, and soon surpassed even the aerobics boom. Nike Inc. has been in the US sneaker business for many years. However, that speed quickly dissipated, and even Adidas was never able to reconsider the brand.
From the clean white sneakers featuring Union Jack to the black and white bullseye basketball boots worn by Shahul O’Neill – the opportunity to take advantage of Reebok’s deep arsenal of classic footwear and clothing styles – could potentially be a motivating factor for buyers.
The Reebok competition is likely to attract interest from sporting goods companies, especially in Asia and private equity shooters, who are well aware of the issue and have asked that the discussions not be identified as private. German publishing manager Magazine said in October that interested parties were included VF, which owns the Timberland and North Face brands and China Anta International Group Holdings.
Although Roerstad had relied on about 2 billion euros ($ 2.4 billion) since selling Reebok before the outbreak, manager Magazine said he would be happy to spend less than that amount now.
Adidas looks like a “clearly motivated seller” and can accept the relatively low price for the Reebok brand, which may have had a relatively neutral effect on revenue, Cowan’s John Kernan said in a note in October.
– With the help of Aaron Kirchfield
(Updates with Reebok history)