After quite some hesitation, Adidas said it would begin a formal process to sell the troubled Reebok brand.
Rumors that the German sportswear manufacturer intends to get rid of Reebok have already appeared. long time ago. To direct questions about this, Adidas representatives answered evasively, arguing that all the brands owned by the company are equally dear to them. It is possible that this was the case, but frankly weak results Reebok repeatedly led to the dissatisfaction of investors who demanded to get rid of the brand, which is considered problematic.
Adidas took over Reebok back in 2006, paying $3.8 billion for the American brand. Since then, the Germans have made many attempts to improve the position of this brand, but all of them were not very effective. At the same time, in the world in general, as well as in the USA in particular, the company managed to significantly strengthen the position of its main brand. This was largely due to active advertising using celebrities like Kanye West, Pharrell Williams and Beyoncé.
In 2016, the post of CEO in Adidas occupied by Kasper Rorsted. They launched a new Reebok recovery plan that helped the brand return to profitability. But even in the best of times, it never came close in terms of performance to the main Adidas brand. Well, then the coronavirus pandemic followed, which had a very negative impact on Reebok's performance - in the third quarter of 2020, sales fell by 7%, to $ 488 million. And this is after the fall of 44% in the second quarter.
And so the final decision was made to abandon Reebok. On how things will play out, Adidas will tell on March 10thwhen the company announces its 5-year development strategy and announces results for 2020. What will be the fate of Reebok is still unknown. There are suggestions that it could simply be sold (estimated value - $ 1.2 billion) or separated into a separate company.
"Reebok and Adidas will be able to realize their growth potential significantly better independently," CEO Kasper Rorsted said in a statement. Meanwhile, analysts say the brand needs to continue its well-established strategy of partnering with celebrities like Cardi B and focusing on womenswear.