Adidas, the iconic sports brand, has been in the news lately due to rumors of a potential sale of one of its subsidiaries – Reebok. The question on everyone’s mind is whether or not Adidas has actually sold Reebok, and what this means for the future of both brands.
Reebok has a long and storied history in the world of sports and fitness, and has been owned by Adidas since 2005. However, recent reports suggest that Adidas may be looking to divest itself of the brand, which has struggled to keep up with the likes of Nike and Under Armour in recent years. So, has Adidas really sold Reebok, and what does this mean for the future of both companies? Let’s find out.
Yes, Adidas has sold Reebok to Authentic Brands Group for $2.5 billion. The deal was announced in November 2021 and is expected to be completed in the first quarter of 2022. Adidas acquired Reebok in 2006 for $3.8 billion but has struggled to revive the brand in recent years. Authentic Brands Group plans to focus on building Reebok’s presence in the fitness and lifestyle categories.
Did Adidas Sell Reebok?
Adidas, the German multinational sportswear giant, had acquired the American fitness brand Reebok in 2006 for a whopping $3.8 billion. Over the years, the brand has struggled to keep up with its competitors such as Nike and Under Armour. Recently, rumors have been circulating that Adidas is looking to sell Reebok. Let’s take a closer look at the situation.
Reasons Behind the Possible Sale
One of the primary reasons for the possible sale of Reebok is its declining sales. Despite Adidas’ best efforts to revive the brand, Reebok has failed to make a significant impact in the market. In the first quarter of 2020, Reebok’s sales fell by 44% due to the COVID-19 pandemic. Additionally, Adidas has been focusing on its core brand and has been investing heavily in its sustainability initiatives. Selling Reebok would help Adidas free up resources to further invest in its core brand and continue its sustainability efforts.
Another reason could be the changing market trends. The athleisure trend, which boosted sales for sportswear brands, is slowly losing its momentum. Consumers are now looking for more sustainable and ethical products. Adidas has been focusing heavily on sustainability, but Reebok has not been able to keep up with the trend. By selling Reebok, Adidas could potentially focus on sustainability and ethical practices across all its brands.
Potential Buyers for Reebok
If Adidas decides to sell Reebok, potential buyers could include private equity firms, other sportswear brands, or even celebrities. Reports suggest that VF Corp, the parent company of brands such as The North Face and Vans, could be interested in buying Reebok. Other potential buyers could be Under Armour, Puma, or even Kanye West, who has a successful partnership with Adidas.
Potential Benefits of Selling Reebok
Selling Reebok could benefit Adidas in several ways. Firstly, it would free up resources and allow Adidas to focus on its core brand and sustainability initiatives. Secondly, it would provide Adidas with a significant cash injection that could be used for future acquisitions or investments. Thirdly, it could potentially improve Adidas’ profitability as Reebok has been a drag on the company’s earnings.
Possible Drawbacks of Selling Reebok
However, selling Reebok could also have its drawbacks. Reebok has a loyal customer base, and selling the brand could lead to a loss of customers. Additionally, selling Reebok could also result in a loss of jobs, which could negatively impact the communities where Reebok operates.
Adidas vs. Nike
Adidas’ decision to sell Reebok could potentially impact its rivalry with Nike. Nike is currently the world’s largest sportswear brand, with a market share of around 27%. In comparison, Adidas has a market share of around 10%. By selling Reebok, Adidas could potentially focus on its core brand and increase its market share, which could pose a threat to Nike’s dominance in the market.
Conclusion
In conclusion, Adidas’ possible sale of Reebok could have significant implications for the sportswear industry. While selling Reebok could benefit Adidas in several ways, it could also have its drawbacks. Only time will tell if Adidas decides to sell Reebok and who the potential buyers could be.
Frequently Asked Questions
Here are some common questions and answers about the sale of Reebok by Adidas.
Did Adidas sell Reebok?
Yes, Adidas announced the sale of Reebok in December 2020. The company has been trying to offload the struggling brand for years, as it has failed to keep up with competitors like Nike and Under Armour.
The sale is expected to be completed in the first quarter of 2022, and the buyer is Authentic Brands Group, a company that also owns brands like Juicy Couture and Nine West. The sale price is reported to be $2.4 billion.
Why did Adidas sell Reebok?
Adidas decided to sell Reebok because the brand has been underperforming for years. Despite efforts to revive the brand, Reebok’s sales and market share have continued to decline. By selling Reebok, Adidas can focus on its core brand and invest in growth opportunities.
Additionally, Adidas has struggled to integrate Reebok into its business since acquiring the brand in 2006. Selling Reebok allows Adidas to streamline its operations and simplify its brand portfolio.
What will happen to Reebok after the sale?
After the sale, Reebok will be owned by Authentic Brands Group. It is unclear what changes the new owner will make to the brand, but it is expected that Reebok will continue to operate as a separate entity. Authentic Brands Group has a track record of acquiring struggling brands and revitalizing them, so there is hope that Reebok could see a turnaround under its new ownership.
However, it is also possible that Authentic Brands Group could choose to sell off parts of the Reebok business or discontinue certain products or lines.
Will Reebok still be sold in Adidas stores?
It is unclear whether Reebok products will continue to be sold in Adidas stores after the sale. However, it is likely that the two brands will become more separate and operate independently. Adidas may choose to focus exclusively on its core brand in its stores, while Reebok will have to find new retail partners and sales channels.
Overall, the sale of Reebok is expected to have a significant impact on both Adidas and Reebok, as well as the wider sportswear industry.
What does the sale of Reebok mean for consumers?
For consumers, the sale of Reebok is unlikely to have an immediate impact. Reebok products will continue to be sold until the sale is completed, and it is unclear what changes the new owner will make to the brand.
However, the sale could potentially lead to changes in the pricing, availability, and marketing of Reebok products in the future. It is also possible that Reebok could see a revitalization under its new ownership, which could lead to new and innovative products for consumers.
Adidas is Selling Reebok to WHO?
In conclusion, the sale of Reebok by Adidas is a significant decision that will impact the athletic apparel industry. While Adidas has not officially confirmed the sale, reports suggest that the company is in talks with potential buyers. If the sale does proceed, it could lead to a shift in market share and brand strategies for both Adidas and Reebok.
Regardless of whether the sale goes through, it is clear that Adidas is focused on restructuring their business and streamlining their operations. This move could allow them to focus on their core competencies and drive growth in their core Adidas brand.
Overall, the sale of Reebok by Adidas is a topic that will continue to be closely watched by industry analysts and consumers alike. It remains to be seen what the future holds for both brands, but one thing is certain – the athletic apparel landscape is constantly evolving, and companies must be agile and adaptable to stay competitive.
