Corona aftermath, trend lagging and falling
North Face parent company and Chinese Anta Sports are mentioned as candidates for acquisition
▲ Kasper Rosted Adidas Chief Executive Officer (CEO) poses at a press conference held in Herzogenaurach, Germany on March 14, 2018. Herzogenaurach/Reuters Yonhap News
Adidas, a famous German sportswear brand, organizes Reebok, the’ugly duckling’.
According to CNN on the 16th (local time), Adidas began a procedure to dispose of Reebok. Reebok’s disposition was included in the five-year plan to be released on the 10th of next month with the announcement of 2020 results. In addition, from the first quarter of this year, Reebok will be disclosed as a discontinued business unit.
Kasper Rosted, the CEO of Adidas, said in a statement that day, “Reebok and Adidas will be able to demonstrate their growth potential far better independently.”
With this, Adidas took over Reebok in 15 years. Adidas acquired Reebok in 2006 for $3.8 billion (about 4.2 trillion won). It was a strategy to target the US market that was dominated by Nike. At the time, Reebok had contracts with American Professional Football (NFL) and American Professional Basketball (NBA).
Since then, as the market share declined due to sluggish earnings, Reebok fell into an awkward complex. Reebok’s share of adidas sales cut in half from 18% in 2010 to 7%.
When Rosted took over as CEO, Reebok started cardiopulmonary resuscitation in 2016. In 2018, it succeeded in turning to the black and signed a contract with pop star Ariana Grande, the highest stock price at the time.
However, in the aftermath of the novel coronavirus infection (Corona 19), the store was closed and sales increased again as it failed to respond quickly to the surge in demand for athleisures (wearing clothes suitable for exercise and comfortable to wear as everyday wear). Sales in the third quarter of last year decreased by 7% compared to the same period last year. This has been under pressure from investors to sell. The value of Reebok is currently estimated at $1.2~1.8 billion, but considering the acquisition of Adidas, it is less than half.
Adidas plans to shake off Reebok and focus on its own brand.
As candidates for the acquisition of Reebok, Vans and North Face parent company VF Corporation, American entertainment company Authentic Brands Group (ABG), and Anta Sports called Nike in China are being discussed.