Adidas Sells Reebok For $2.5 Billion, Says Brand No Longer As Strong As Products
Image via ID 165564687 © Yekatseryna Netuk | Dreamstime.com
Adidas, which acquired Reebok in 2005 for US$4 billion, is now selling the sportswear brand to Authentic Brands Group for US$2.5 billion.
Reebok will join a slew of struggling brands under Authentic’s care, including Brooks Brothers and Forever 21. According to The New York Times, this deal comes as Authentic prepares to go public.
“We’ve had our sights set on Reebok for many years. Reebok not only holds a special place in the minds and hearts of consumers around the world, but the brand also has expansive global distribution,” said Jamie Salter, Chief Executive of Authentic.
At the moment, Reebok has stores in 80 countries, with approximately 70% of its business done outside the US and Canada. Following the acquisition, the brand’s headquarters will remain in Boston, Massachusetts.
It’s no surprise Adidas is keen to offload Reebok, considering the brand’s sales fell 19% from €1.75 billion (US$2.05 billion) in 2019 to €1.41 billion (US$1.65 billion) in 2020. Reebok isn’t the only brand Adidas has sold, as it joins the ranks of golf brand TaylorMade and shoe brand Rockport, as per The New York Times.
It seems Reebok had been struggling under Adidas since 2016, when Kasper Rorsted, Chief Executive of Adidas, said: “For a given period of time, the brand was probably stronger than the products. Right now, I would argue that our products are stronger than the brand, and we need to make sure that we reconnect our consumers with the brand we have.”
As it turns out, Adidas didn’t quite succeed with bringing the brand back to its glory days. Basketball superstar, Shaquille O’Neal, who had a sneaker line with Reebok in 1992 and sold a percentage of his own brand to Authentic in 2015, said the sale was a positive step.
“It’s a dream come true to welcome this legendary brand to the family,” he said on behalf of Authentic.
[via The New York Times, cover image via ID 165564687 © Yekatseryna Netuk | Dreamstime.com]
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