Adidas Is Selling Reebok to Focus on Strengthening Its Own Brand
After over two months since Adidas announced its intention to sell Reebok, the sportswear company has revealed why exactly it is selling. In an updated statement, Adidas said the reason for the sale was to focus on strengthening its own brand.
Adidas is set to present its five-year plan on March 10. The business plan will also include more details on the brand's decision to discontinue Reebok's operations. Read Adidas' full statement below.
As part of the development of its new five-year strategy, adidas has concluded its assessment of strategic alternatives for Reebok. As a result of this review, the company has now decided to begin a formal process aimed at divesting Reebok. Going forward, the company intends to focus its efforts on further strengthening the leading position of the adidas brand in the global sporting goods market. Accordingly, adidas is going to report Reebok as discontinued operations from the first quarter 2021 onwards. More details on adidas’ strategic business plan until 2025 will be unveiled at the company’s virtual Investor and Media Day on March 10, 2021.
“The long-term growth opportunities in our industry are highly attractive, particularly for iconic sports brands,” said adidas CEO Kasper Rorsted. “After careful consideration, we have come to the conclusion that Reebok and adidas will be able to significantly better realize their growth potential independently of each other. We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it.”
adidas acquired Reebok in 2006. As a result of the successful implementation of the turnaround plan "Muscle Up" initiated in 2016, the brand was able to significantly improve its growth and profitability prospects, laying the foundation to unleash its full potential in the highly attractive global sporting goods market.
The sale comes 14 years after Adidas acquired Reebok for $3.8 billion. Rumors about Adidas selling Reebok have circulated for years. Market analysts had said that the sale was more likely back in October because of declining sales due to the coronavirus pandemic.
In its second-quarter earnings report, Reebok’s 2020 revenues fell by 42 percent. But, according to reports, interested parties in the sale include private equity firms Permira and Triton, China's Anta Sports, and VF Corp., which recently acquired Supreme.