It’s official: Adidas Group has kickstarted process to sell Reebok

Feb 17, 2021

THE WRITING was on the wall for Reebok, which had long been dogged by rumors that its parent company would sell it off. And now, adidas made it official, formally announcing that it has “now decided to begin a formal process aimed at divesting Reebok.”

The Germany-based multinational made the announcement today (Manila time) in a press release.

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    Adidas CEO Kasper Rorsted spoke diplomatically of the development. “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,” he said in a statement.

    He added: “We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it.”

    What this future holds is as yet unclear, with no concrete details beyond adidas Group’s brief statement.

    “Options for Adidas include spinning Reebok off as a stand-alone public company, or selling the brand to private equity, another major sports retailer or a multibrand player like VF Corp,” said Reuters in a report.

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    A source told Reuters that the business is worth $1.2 billion.

    This is a significant downgrade from 15 years ago, when adidas bought the brand for $3.8 billion.

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    The brand has been on a severe downturn in recent years. Reebok’s revenues fell by 44 percent in the second quarter of 2020. It fell further by 7 percent in the third quarter.

    “The impairment of retail stores and the Reebok trademark” was specifically named by adidas as among the six factors that greatly impacted the company’s profit in the first nine months of 2020, according to adidas’ latest financial report.

    Also unclear is this announcement’s impact on local operations of Reebok and adidas in the country.

    SPIN Life has sent messages to adidas brand representatives for clarification, and we will update this story when we receive it.

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