Tuesday, April 23, 2024

Adidas considers selling Reebok brand

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Adidas, the German sportswear giant, says it has started looking at whether to keep its Reebok brand or sell it.

The company said it had made no firm decisions yet about Reebok, which is mainly focused on the United States (US) market.

Adidas said it would make the announcement on its future in March.

It paid $3.8bn (£2.85bn) for Reebok in 2006 and a number of names have emerged as potential buyers, including the private equity firm Permira and Timberland brand owner, VF Corp.

Permira owns the Dr Martens footwear company.

Adidas said the possible sale was part of the development of its new five-year strategy.

Adidas said action it had taken in 2016 under a turnaround plan called “Muscle Up” had revived Reebok’s flagging fortunes, increasing sales and profits.

Figures show Reebok’s revenue grew by 4% to €1.7bn in 2019, making up just seven per cent of Adidas’ total annual sales.

However, the brand’s sales were down seven per cent in the most recent quarter – a steeper fall than other parts of the business, which executives blamed on a slower recovery in North America than in Europe.

Since Adidas took over the company, Reebok’s popularity has waned.

The brand once held major sponsorship deal with the US’s lucrative National Basketball Championship (NBA) but that was assumed by Adidas when it took over Reebok.

It currently has a six-year $70m deal with the martial arts promotion company, Ultimate Fighting Championship, but that is due to come to an end shortly. (BBC)

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