Adidas to part ways with Reebok
Adidas announced on Tuesday its intention to separate from Reebok, either by a sale or by a split, 15 years after buying this American brand, which it has not been able to revive completely, with the hope of better competing Nike.
German sportswear supplier Adidas announced on Tuesday that it will sell its struggling American subsidiary Reebok, whose fate had been uncertain for several months, to focus on his brand. The group “decided to launch the formal process for a sale of Reebok”, bought in 2006 for 3.1 billion euros, and “will focus in the future on strengthening the Adidas brand as a leader in the world sports market,” he said in a statement, without revealing potential buyers at this stage.
“After careful consideration, we have come to the conclusion that Reebok and Adidas can achieve significantly better growth potential by being independent of each other.”
The Reebok brand will already appear outside the scope of the group from the financial results for the first quarter of 2021, it is specified. “Further details” on the strategic direction of Adidas until 2025 will also be announced by the group on March 10 during a presentation by Danish boss Kasper Rorsted to financial analysts and the press. “After careful consideration, we have come to the conclusion that Reebok and Adidas can achieve significantly better growth potential by being independent of each other“Says Mr. Rorsted in the statement.
In the third quarter of 2020, the flagship brand Adidas saw its sales fall by 2% against 7% for its little sister Reebok, which depends heavily on the US market.
Since the takeover of the American equipment manufacturer, known for its lines of sneakers, Adidas has failed to relaunch the brand, regularly fueling rumors about a possible sale. The American group VF Corp (owner of the brands The North Face and Timberland in particular) and the Chinese Anta Sports are considered as potential buyers.
The value of Reebok in Adidas’ balance sheet could also undergo an accounting brush again in the annual results for 2020 which will be revealed on March 10. Reebok is currently only worth 803 million euros after several accounting depreciations. The last depreciation came in August after an even sharper drop in sales in the second quarter of 2020, by 42%, due to the coronavirus pandemic.
Reebok’s revenue grew another 2% in 2019 to € 1.75 billion, while representing only a modest part of the 23.6 billion euros of the entire Adidas group. On the stock market, the Adidas share hardly reacted to the announcement of the day, remaining down at 4 p.m. by around 1% in a market in slight decline.