Now that Adidas found a buyer for Reebok, the future of the Boston-based footwear brand is in flux.
Adidas said on Thursday that it entered into an agreement to sell Reebok to Authentic Brands Group (ABG) in a mostly cash deal worth €2.1 billion, or about $2.5 billion at current exchange. The deal is set to close in Q1 of 2022.
Reebok has been owned by Adidas since 2006, when the German sportswear maker purchased the brand for $3.8 billion. However, after years of revenue decline and an attempt launch a turnaround plan, Adidas announced it would sell the business in December of 2020.
Now Reebok has found a new owner, the company behind dozens of brand and retailer acquisitions. With a portfolio of more than 30 brands, ABG has a history buying up struggling brands such as Juicy Couture, Forever 21, Barneys New York J.C. Penney, and Brooks Brothers. According to experts, the addition of Reebok could be a major asset to the company.
According to Matt Powell, senior sports industry adviser for The NPD Group Inc., Reebok’s US sales were up 76% in the first six months of 2021, versus 36% for the industry. This growth reflects both men’s and women’s sales.
“Most of the other brands ABG has bought were on life-support at acquisition,” Powell said. “This is the first really thriving brand ABG has bought.”
While Reebok has stumbled over the years, sometimes failing to compete with bigger brands like Nike and Adidas, the current consumer environment is benefiting performance and lifestyle footwear and apparel brands, including Reebok. Its new owners understand the power of this moment.
“It’s one of those brands that is globally famous and has permission to play in many fields, whether it’s fashion, whether it’s performance, whether it’s athletic, whether it’s athleisure,” said ABG president and CMO Nick Woodhouse. “It’s kind of hard for the brand to fail.”
Reebok can also be used to fill the empty space in wholesale stores, which has largely been caused by Nike and other major footwear brands pulling out of retailers to focus on direct to consumer sales.
“Authentic Brands has been skilled in doing this and with Nike withdrawing from many retailers, there is a gap to be filled if Authentic Brands can come up with compelling proposition,” said Neil Saunders, managing director of GlobalData, a data analytics and consulting company.
For the most part, the plan is to keep on doing what Reebok does well as opposed to remaking the entire brand from scratch.
In a press release, Jamie Salter, the founder, chairman and CEO of ABG, said that the company is “committed to preserving Reebok’s integrity, innovation, and values,” building on the existing success of the brand.
“Reebok has so much permission to evolve,” Woodhouse said, specifically noting the brand’s position in the crucial categories of women, running and performance. “I think it will be a combination of a focus on on fashion and athleisure and a focus on performance. So not a lot of departure from what the team’s doing today. Probably just more of the good stuff.”
And while Woodhouse said he “won’t chase the glory of yesteryear,” there are plans to bring back certain retro styles from the old days of Reebok. Shaquille O’Neal, an ABG owner and former Reebok athlete, was a major part of bringing the deal to fruition, and consumers can likely expect to see more retro styles from his Reebok line reintroduced in the near future.
Powell said that Reebok’s retro offerings are one of the biggest advantages for the brand. The challenge for ABG will be to find a balance between preservation and innovation.