German sportswear company Adidas plans to sell its underperforming Reebok brand—some 15 years after Adidas acquired the Boston-based brand to help it compete in the American market—as part of a strategic shift focused on strengthening its own position in the global sporting goods market.
- Adidas said it decided to begin the formal divestiture process for the U.S. brand as part of its new five-year strategy, details of which will be unveiled on March 10.
- Adidas said it would be reporting Reebok as discontinued operations from the first quarter of 2021.
- Adidas acquired Reebok 15 years ago in an attempt to expand its presence in the U.S. market, though it said it had been considering “strategic alternatives for Reebok” after a business review published in late 2020 highlighted lackluster performance.
- “Reebok and Adidas will be able to significantly better realize their growth potential independently of each other,” CEO Kasper Rorsted said in a statement Tuesday, emphasizing the “highly attractive” long-term growth opportunities in the market for “iconic sports brands.”
- “We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it,” he added.
WHAT TO LOOK FOR
There are several options for Reebok after Adidas. The brand could be spun out into an independent company, or sold to another retailer, group or private equity. According to Reuters, the brand’s recent collaborations with celebrities like Cardi B and focus on women’s apparel put it in a good position.
$1 billion. This is how much the business could be worth, according to a banking source cited by Reuters.