On Tuesday, Adidas, the German apparel company is preparing to divest its struggling brand Reebok. In 2006, Adidas acquired Reebok for approximately $3.8 billion to compete with Nike, but in recent years, Reebok has posted inadequate sales. Adidas said that it has started an official process to separate from Reebok, and the company is turning to focus on its main brand.
CEO of Adidas, Kasper Rorsted said in a statement, “After careful concern, we have concluded that Reebok and Adidas will be able to significantly better realize their growth potential independently of each other.” “We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it”, he added. Adidas also said it would be reporting that the brand Reebok has stopped operation from the starting of 2021.
The company has not yet specified the main purpose for the divest, neither did it say whether it would look to make the brand Reebok an independent company or sell it. Adidas said that the company has developed a new five-year policy that includes “further strengthening the leading position of the Adidas brand in the global sporting goods market.”
Reebok brand in the current year has been strained to position itself as a go-to very highly sporty individual, with UFC and Crossfit, it is a very high-profile partnership. In 2017, the CEO of Adidas had defended the parent brand Adidas’ conclusion not to sell the brand.
The CEO in the meeting of investors said that the company is not going to sell the brand Reebok because they are very confident about the deliberate position of Reebok. Rorsted said, “We are dedicated to dealings we are taking, are going to be prosperous.”
After the divest of Reebok, there are more options for Reebok. Reebok could become a self-governing company, or the brand could be sold to another vendor, group, or secluded equity. According to Reuters, to put in a good position the company has collaborated with celebrities like Cardi B and is about to focus on Women’s apparel.
