Business

Adidas considers selling off its Reebok brand

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Adidas, the German sportswear giant, says it has started looking at whether to keep its Reebok brand or sell it.

The company said it had made no firm decisions yet about Reebok, which is mainly focused on the US market.

Adidas said it would make the announcement on its future in March.

It paid $3.8bn (£2.85bn) for Reebok in 2006 and a number of names have emerged as potential buyers, including the private equity firm Permira and Timberland brand owner, VF Corp.

Permira owns the Dr Martens footwear company.

Adidas said the possible sale was part of the development of its new five-year strategy.

Adidas said action it had taken in 2016 under a turnaround plan called “Muscle Up” had revived Reebok’s flagging fortunes, increasing sales and profits.

Figures show Reebok’s revenue grew by 4% to €1.7bn in 2019, making up just 7% of Adidas’ total annual sales.

However, the brand’s sales were down 7% in the most recent quarter – a steeper fall than other parts of the business, which executives blamed on a slower recovery in North America than in Europe.

Brand struggles

Since Adidas took over the company, Reebok’s popularity has waned.

The brand once held major sponsorship deal with the US’s lucrative National Basketball Championship (NBA) but that was assumed by Adidas when it took over Reebok.

It currently has a six-year $70m deal with the martial arts promotion company, Ultimate Fighting Championship, but that is due to come to an end shortly.

Last year, the company cut nearly in half its estimate of the brand’s value.

Reebok’s headquarters are in Boston, Massachusetts, but its roots are in Bolton, England, where the Reebok name was first employed in the 1950s, before being picked up by a US entrepreneur.

The company’s modern success came on the back of its development in 1982 of the Reebok Freestyle aerobics shoe, the first athletic shoe designed for women, at the start of the aerobics fitness trend.

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