- Adidas said on Tuesday that it plans to divest its Reebok brand.
- The German company bought Reebok in 2006 for $ 3.8 billion, but Reebok’s sales have since declined.
- Adidas plans to focus its efforts on its flagship brand.
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German clothing company Adidas is preparing to sell its Reebok brand, the company announced on Tuesday.
Adidas acquired Reebok in 2006 for about $ 3.8 billion in an attempt to compete better with Nike, but the brand has registered disappointing sales figures in recent years. Adidas said on Tuesday that it has initiated a formal divestment process from Reebok, focusing on its core brand.
“After careful consideration, we have come to the conclusion that Reebok and adidas will be able to realize their growth potential significantly better independently of each other,” said Adidas CEO Kasper Rorsted in a statement. “We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it.”
Adidas did not specify the reason for the move, nor did it say whether it would consider turning Reebok into an independent company or selling it immediately. The company said on Tuesday that it has developed a new five-year strategy that involves “further strengthening the Adidas brand’s leadership position in the global sporting goods market”.
Reebok in recent years has tried to position itself as a reference for highly athletic individuals with high profile partnerships in the UFC and Crossfit.
In 2017, Rorsted had defended the decision of controller Adidas not to sell the brand.
“We are not going to sell Reebok because we are still very confident in the brand’s strategic position,” said Adidas CEO Kasper Rorsted, at an investor meeting that year. “We are convinced that the measures we are taking will be successful.”
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In 2007, the year following Adidas ‘acquisition of Reebok, the latter accounted for about a quarter of Adidas’ total retail sales – about $ 2 billion. In the quarter ended September 2020, only 6.7% of Adidas’ net sales came from Reebok.
Bloomberg said Adidas planned to sell Reebok in October.
A bank source told Reuters on Tuesday that the brand could be worth about $ 1.2 billion, meaning Adidas could take more than $ 2 billion from the sale.