Will Adidas brand sell Reebok in the 5-year development roadmap?

The Adidas is starting to look at the sale of the Reebok sub-brand as part of its next five-year development strategy roadmap. Where will Reebok’s future be?

On Monday (December 14, 2020), the adidas brand announced that their decision to sell Reebok will be announced on March 10, 2021 as part of its next five-year plan.

In 2006, adidas group AG bought Reebok for $ 3.8 billion and over the years, the US sub-brand’s business has not been very good, and in just a few years. Back here, Reebok’s growth has shown some notable highlights. However, that is not enough for the adidas brand to continue its strategy of counterbalancing Nike in the North American market, and has led to the parent group’s consideration of the decision. According to Bloomberg, adidas is looking to recoup the cost of this purchase, in order to begin focusing on a new strategy that has been in place since October this year.

In November 2020, the Financial Times reported that global private equity firms such as Permira and Triton were aiming to acquire Reebok, although all plans have not been completed until now. Exploratory levels and yet to come to negotiation. The German publisher – Manager Magazin – also reported in October that interested parties in the deal also include slick names like VF Corp. (currently owns notable names such as Supreme (acquired this year), The North Face, Vans, Timberland, Dickies …) and China’s Anta International Group Holdings (owning Anta, Fila, Salomon, Arc’Teryx…).

Photo: Anta International Group Holdings

Since taking on the role of CEO of adidas since 2016, Kasper Rorsted has focused on fixing Reebok’s protracted business stagnation. He closed ineffective stores, did not renew expired licenses, and cut businesses in non-revenue generating categories …

Although from the beginning of 2019, Reebok has finally made a profit, but now Rorsted’s vision has changed, he wants to focus on promoting business in new lines of sports shoes (performing) such as CrossFit. Nano and FloatRide Run instead of reopening and investing in closed portfolios.

Adidas CEO Kasper Rorsted.
According to Manager Magazin, prior to the Covid-19 pandemic, Rorsted hoped that the sale of Reebok could bring in $ 2.4 billion, but given the current situation, that is unlikely to happen and perhaps Adidas will have to accept a lower number.

For now, everything is still on plan and we need to wait until March next year to see what the final decision is, which name Reebok will belong to.

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