German sportswear maker Adidas AG plans to sell its underperforming brand Reebok, 15 years after the US fitness label was bought to help compete with arch-rival Nike. Adidas will divest Reebok as a part of a five-year strategy it plans to present on March 10. It will report Reebok as a discontinued operation from the first quarter of 2021. It will either spin off Reebok as a stand-alone public company, or sell the brand to private equity, another major sports retailer or a multibrand player like VF Corp.
The company bought Boston-based Reebok for $3.8 billion in 2006 but its sluggish performance led to repeated calls from investors to dispose of the brand. The brand’s net sales fell 7 per cent in the third quarter of 2020 to €403 million after falling as much as 44 per cent the preceding quarter. In 2019, Adidas wrote down Reebok's book value by nearly half, compared with 2018, to €842 million.
Analyst believe Reebok's recent collaborations with celebrities like Cardi B and a refreshed focus on women's apparel have put the brand in a better place.
