SUMMARY
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German sportswear giant Adidas said on Monday, December 14, it was mulling a sale of its long-struggling United States subsidiary Reebok.
“Adidas has begun to assess strategic alternatives for Reebok,” the company said in a statement, adding these “include both a potential sale of Reebok as well as Reebok remaining a part of the company.”
A decision will be announced on March 10, it added, when the group will present a new 5-year strategy.
Adidas acquired Boston-based Reebok in 2006 for 3.1 billion euros ($3.8 billion) to take on US rival Nike. But the brand has struggled to grow under its German owner, frequently fueling speculation of a sale.
The brand is now worth only 803 million euros, after several accounting write-downs, the last of which occurred in August after a 42% drop in sales in the 2nd quarter to 228 million euros.
Germany’s Manager Magazin reported in October that China’s Anta Sports and North Face owner VF Corporation were interested in acquiring Reebok.
As far back as 2017, Adidas chief executive Kasper Rorsted had to face down shareholders calling for the sale of then loss-making Reebok.
A turnaround plan initiated in 2016 reversed declining sales by 2019, before the pandemic forced store closures and halted the momentum.
At the peak of the coronavirus restrictions in the 2nd quarter, the Adidas group was forced to close around 70% of its stores worldwide.
With sales of 1.75 billion euros in 2019, up 2% on the year before, Reebok accounted for just a fraction of the Adidas group’s 23.6 billion euros in revenues last year.
Adidas at 1430 GMT traded up almost 1.7% at 288 euros on news of a potential sale, compared with a 1% rise in Frankfurt’s blue-chip Dax index as a whole. – Rappler.com
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