ABG Is One Of The Potential Purchasers For Reebok Brand
UNITED KINGDOM — In October 2020, D.M. Fashion Book reported that reported German sportswear, sneaker and apparel giant Adidas was considering selling Boston-based athletic footwear and apparel company Reebok (see it here).
Adidas, which owns Reebok, publicly confirmed rumors that it was exploring options for the brand. Reports have been circulating for months that the company was looking to sell the brand, which it acquired in 2006 for $3.8 billion. Last year, it reportedly wrote the value of the brand down to just under $1 billion.
As part of its new five-year strategy, Adidas said it “has begun to assess strategic alternatives for Reebok. These strategic alternatives include both a potential sale of Reebok as well as Reebok remaining a part of the company. A decision will be announced on March 10, 2021, when the company’s new strategy is officially presented.”
A source close to ABG confirmed that the company is definitely interested in talking to Adidas about potentially adding the brand to its stable, which already includes Barneys New York and Brooks Brothers, and Forever 21. On the activewear side, ABG counts Spyder, Greg Norman, Prince, Above the Rim, Hind and Volcom as among its properties. It also owns Sports Illustrated as well as the IP for Muhammad Ali and Julius Erving.
Other names that have been mentioned as potentially interested in Reebok include VF Corp., which owns The North Face, Timberland and Vans, and Anta Sports, the China-based parent of Fila and Descente.
Reebok has long been overshadowed by its parent company and has been a perennial underperformer. Although results have improved in the past couple of years, the brand has struggled more than its parent during the pandemic.
Yesterday, Adidas said since it implemented its “Muscle Up” turnaround plan in 2016, results at Reebok were “significantly” improved and the brand returned to profitability in 2018, two years earlier than originally projected. In 2019, Reebok’s sales rose 3.6 percent to 1.75 billion euros, but were down 27.3 percent to 600 million euros in the first half of this year as the coronavirus shut down retail, particularly in the hard-hit U.S. and Europe.
In the third quarter of this year, Reebok’s revenues continued to fall. The brand posted a decline of 7 percent in the three months and 20 percent in the nine months. In contrast, sales at the Adidas brand were down 2 percent in the third quarter.
In reporting the results in late November, Adidas’ chief executive officer Kasper Rørsted attributed Reebok’s decline to the brand’s limited exposure to the popular running and outdoor categories and its higher exposure to the U.S. market.
Overall, Adidas said it was making progress to becoming more of a digital-first company, generating 40 percent of its overall sales in the period in this channel, up from 30 percent in the third quarter the year before. However, it projected fourth-quarter revenues would be down in the low- to mid-single digits.
Matt O’Toole, Reebok’s president, declined to comment on the news of Adidas’ decision on Monday — or management potentially banding together to buy the brand from its parent. He instead deferred to the head of Adidas’s corporate media relations, who said: “At this time no decision has been taken about a sale, and Adidas could also decide to continue owning Reebok as part of its new strategy. A decision will be communicated as part of the official launch of our new strategy on March 10, 2021. So at this time, we are not able to speculate on potential buyers.”
Last year, Reebok made the decision to unite all of its product categories under its Vector logo, a well-known mark that made its initial appearance nearly three decades ago. In September, the brand named Kerby Jean-Raymond vice president of creative direction (see it here). Jean–Raymond, designer of the Pyer Moss label, started working with the brand in 2017.
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