- Company launched “Muscle Up” plan to boost Reebok sales in 2016
- Adidas CEO says sale will not impact its 2021 profits
Global sportswear giant Adidas has sold Reebok to Authentic Brands Group (ABG) for €2.1 billion (US$2.5 billion).
The Germany-based company acquired Reebok for a reported US$3.1 billion in 2006, however Adidas has since sold off €400 million (US$469.5 million) worth of assets involved in the original deal.
In 2016, with the arrival of new chief executive Kasper Rorsted, Adidas set out to boost Reebok’s sales and profitability through its new ‘Muscle Up’ plan. While this was initially successful in boosting the brand’s profits, the pandemic has hampered that strategy.
New buyer ABG also owns US magazine Sports Illustrated, as well as other clothing brands Forever21 and Aeropostale. Reebok will keep its headquarters in Boston and continue operations in North and Latin America, Asia-Pacific, Europe and Russia.
“We've had our sights set on Reebok for many years, and we’re excited to finally bring this iconic brand into the fold”, said ABG founder and chief executive, Jamie Salter.
“We are committed to preserving Reebok’s integrity, innovation, and values – including its presence in bricks and mortar.”
For its part, Adidas has stated that the sale will not impact the company’s projections for 2021, or for its five-year ‘Own The Game’ strategy launched in 2020.
Adidas recently revealed in its Q2 report that Reebok’s sales had increased from €600 million (US$704 million) to €823 million (US$966 million) during the first half of 2021. Reebok reportedly suffered more than US$100 million in losses in 2020.
The deal with ABG is expected to close by the first quarter of 2022, with the majority paid in cash to be redistributed among Adidas shareholders.
Rorsted, said: “Reebok has been a valued part of Adidas, and we are grateful for the contributions the brand and the team behind it have made to our company. With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success.
“As for Adidas, we will continue to focus our efforts on executing our ‘Own the Game’ strategy that will enable us to grow in an attractive industry, gain market share, and create sustainable value for all of our stakeholders.”
Adidas has sold Reebok to ABG for €2.1 billion
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