As the world continues to deal with the mega-shock that the pandemic has delivered, the fashion sector and related industries continue to deliver surprises too, with the latest on Thursday being a report that Adidas is planning to sell its Reebok division. But perhaps it’s less of a surprise given that the unit has underperformed for some time and has been a drain on the more successful Adidas branded operation. Investors have been pressuring Adidas to dispose of it for and the parent firm’s shares rose after the report appeared.
The story was in Germany’s Manager Magazin and claimed that Adidas wants the sale to be signed, sealed, and delivered by next March. Neither Adidas nor Reebok have commented and the magazine didn’t say where it got the information, nor did it speculate on how much Reebok might fetch. But it did say that Adidas had written down Reebok’s book value by almost half to €842 million in the past two years.
German-owned but US-based, Reebok was actually founded in the UK in the 1950s by the grandsons of Joseph William Foster, who had created some of the earliest spiked running shoes in the 1890s.
It stayed a UK company until its US licensee, under Paul Fireman, bought the firm in the 1980s. Adidas acquired it in 2005.
Adidas paid $3.8 billion for Reebok 15 years ago, but it didn’t prove to be the North American success story that it might have hoped for and in its most recent quarter (Q2), its sales fell 44% due to its exposure to the weak US market.
And the loss Adidas made for that quarter included the impairment of retail stores and the trademark of the struggling Reebok brand.
So if Adidas doesn’t want Reebok, who would? The German magazine on Thursday suggested US-based VF Corp and China’s Anta Sports as possible bidders. But, like Adidas itself, neither of them has commented.