HERZOGENAURACH, Germany: After 15 years of ownership, adidas has begun the formal process aimed at divesting its Reebok brand.
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.”
Reebok, founded in Bolton, Lancashire, in 1958 and now based in Boston, Massachusetts, was bought by adidas in 2006 for €3.1 billion as part of its efforts to take on Nike.
According to The Guardian, Reebok is expected to be sold for less than € 2 billion as the brand has struggled despite the trend for sports clothing and athleisure, which has accelerated during the coronavirus pandemic.
The UK daily further reported that adidas had wiped hundreds of millions off the value of Reebok on its books in 2018, giving it an accounting value of €800 million, after admitting that the brand’s earning potential had been overestimated.
Potentially interested parties are reported to include VF Corporation, the owner of North Face and Timberland; Anta Sports, the Chinese sportswear firm; and Authentic Brands, the owner of Forever 21, Nine West and Juicy Couture.
