Rumors that Adidas AG is firming up plans to divest the Reebok brand are gaining steam.
A New York Times report on Tuesday indicated that Adidas is working with investment bank JPMorgan Chase & Co. to sell Reebok in a transaction that could happen as early next year. Sources told the publication that Reebok could garner around $1 billion — a significant decline from the $3.8 billion Adidas shelled out for the brand in 2005, although the valuation could change.
In response to an email inquiry from FN, a spokesperson for Adidas said that, as a matter of company policy, “we do not comment on rumors or speculations.” As of press time, Reebok did not immediately respond to FN’s request for comment.
Although it has been speculated for years that the German sportswear giant is looking to sell the athletic brand, the rumors have picked up in recent months. In October, a Bloomberg report indicated that an internal review of such a sale is in the early stages, while Germany’s Manager Magazin suggested that Adidas plans to complete the sale by March 2021.
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Among the parties interested in acquiring Reebok, according to Manager Magazin, are Vans and Timberland parent VF Corp. as well as China’s Anta International Group Holdings Ltd. (VF Corp. this month acquired streetwear juggernaut Supreme, which could impact its supposed interest in Reebok.) The report indicated that Adidas had written down the value of Reebok by almost half to 842 million euros (or about $995 million at current exchange) since 2018.
In the 15 years since Adidas snapped up Reebok, the brand has experienced uneven sales as it struggles to resonate with United States consumers. Meanwhile, its licensing contracts with the NFL and NBA have expired, further compromising revenue growth and leading market watchers to question whether Reebok’s future is strongly aligned with that of its parent.
When Adidas CEO Kasper Rorsted joined the company four years ago, he helped launch a new business strategy for Reebok with the goal of returning it to profitability by this year. Through its renewed focus on the women’s category and a resurgence of ’90s fashion trends as well as its enlisting of influencers, including rap star Cardi B, the brand has managed to reintroduce itself to a younger generation of consumers.
However, its challenges have been persistent. In the second quarter reported in August, Reebok posted a 42% decline in sales — compared with the Adidas brand’s 33% dip in revenues — due to its higher exposure to the United