When Authentic Brands Group (ABG) announced in August that it would acquire Reebok from Adidas, it began the journey of completing arguably the biggest shoe deal of 2021.
The $2.5 billion deal is expected to close in Q1 2022. As that completion date nears, certain details of the footwear brand’s trajectory are already coming to light, such as licensing partnerships, design strategies and retail sales targets.
Under ABG, CEO Jamie Salter said Reebok will see global retail sales of more than $5 billion in 2022. In the next five years, the goal is to hit $10 billion in annual retail sales globally. ABG also plans to grow Reebok’s digital business, as well as lean into the footwear and apparel designs that have made Reebok unique.
To formulate the plan, Salter is working alongside ABG president and CMO Nick Woodhouse, as well as former NBA star Shaquille O’Neal (the second-largest individual shareholder of the company behind dozens of brand and retailer acquisitions, including Forever 21, Barneys New York and JCPenney). O’Neal has unique perspective on Reebok — in 1992, he signed a multiyear year deal with the athletic brand worth $15 million, and they launched a series of sneakers, including the popular Reebok Shaq Attaq. When he joined ABG, O’Neal became a crucial part of helping push the company through the acquisition process.
Salter told FN recently that under ABG, Reebok will bring back some of O’Neal’s classic shoes and also allow employees to lean into designs that they couldn’t fully explore under Adidas’ leadership.
“We basically said to the employees: show us what you want to do, tell us what you want to do,” Salter said regarding his approach to design and product at Reebok in an interview with FN. “It’s going to be sort of a bonanza.”
In the last few months, ABG has announced partnerships with different licensing groups to help distribute Reebok across the globe. In November, ABG signed a deal with SPARC Group to make it the official licensee and operating partner for Reebok in the U.S. Under the agreement, SPARC will handle sourcing and manufacturing and oversee retail and e-commerce operations for Reebok in the U.S.
Beyond the U.S., ABG in December signed a deal with Aditya Birla Fashion and Retail Limited (ABFRL) to give the Indian fashion company exclusive distribution and sales rights for Reebok products in India, Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka.
Early this month, ABG signed a license agreement with Tristate Holdings Limited for it to be the core licensee and operator for Reebok in China, Hong Kong, Macau and Taiwan. Tristate currently operates licenses for the Nautica and Spyder brands, which are also owned by ABG.
And today, ABG said it inked a deal with Al Boom Marine (ABM), a company under the portfolio of Scope Investment, to become the operating partner for Reebok in the GCC, the Middle East — including Iraq and Lebanon — and North Africa including Algeria, Egypt and Morocco. The agreement includes footwear for men, women and kids as well as activewear and sportswear for men and women.
Unlike the struggling brands that ABG typically goes for, Reebok has already showed early signs of success. According to The NPD Group Inc., Reebok’s U.S. sales were up 76% in the first six months of 2021, versus 36% for the industry. This growth reflected both men’s and women’s sales.
“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,” Woodhouse told FN. “It’s kind of hard for the brand to fail.”
While many market watchers are upbeat, ABG is making changes ahead of the deal’s closing.
This week, the Boston-based brand confirmed to FN that it will lay off 150 people in Q1 of 2022.
Reebok employs 4,000 people across the globe, with 450 people in its Boston headquarters. The majority of people impacted by the layoffs work in Boston, Reebok confirmed. Even after the acquisition is completed, Reebok HQ will remain in Boston, the brand confirmed.