Adidas is selling Reebok to Authentic Brands, a celebrity and garment licencing company located in the United States, for up to €2.1 billion, putting an end to the German sportswear company’s ill-fated takeover of Reebok more than 15 years ago. Because of stranded expenses associated with the divestment, the net revenues from the sale will be around €325 million lower than the original price tag.
In 2005, Adidas spent $3.8 billion for Reebok in order to compete with Nike in its home market, but the brand struggled with low sales and losses. Neil Saunders, managing director of GlobalData, a data analytics and consulting company, said, “While Adidas did manage to restore Reebok to profitability it was far less successful in building a brand that was able to steal share and capture the hearts and minds of consumers.”
It wasn’t seen to be the go-to brand for athletes or those looking for athleisure fashion and style. After a series of restructuring plans and strategic rejigs, Reebok was slated for sale late last year, attracting attention from private equity groups such as Permira and Triton. Adidas had made €400 million by selling several lesser brands it had acquired with Reebok. We believe the Reebok brand will be well-positioned for long-term success as a result of this shift in ownership.
Authentic Brands, situated in New York, is part-owned by BlackRock, a US financial management that spent $870 million for a controlling position in the company in 2019. The corporation holds the Marilyn Monroe and Muhammad Ali trademarks, as well as a fashion portfolio that includes Forever 21 and Eddie Bauer. The new owner will hire 4,300 Reebok employees, with three-quarters of them working in retail. Authentic Brands’ founder and CEO, Jamie Salter, described the deal as an important milestone for his company. It was a huge acquisition for Authentic Brands, according to Saunders, and it solidifies the company’s position as a key player in American retail.