Adidas is selling Reebok for short of what it initially paid

Adidas is selling Reebok for short of what it initially paid

Adidas (ADDDF) purchased Reebok for $3.8 billion in 2006, back when Reebok was riding high and had dealt with the NBA and NFL. Presently, Adidas is selling the drooping brand for up to $2.5 billion.

Adidas said Thursday that it had arrived at a deal with Authentic Brands Group to offload Reebok. The deal is relied upon to shut in the first quarter of 2022, and Adidas will be paid most of the amount in cash then, at that point. Authentic Brands Group has gathered up bankrupt brands, for example, Brooks Brothers, Aéropostale, and Forever 21 in recent years and filed to go public last month.

Adidas reported its aim in February to start a formal process to strip Reebok following an audit of the brand that it declared before the end of last year. Adidas said that it needed to offer Reebok to zero in its endeavors on reinforcing its own image in the global sportswear market.

The German-based organization purchased Reebok in 2006 to extend its span in the United States and take on Nike (NKE) in its home market.

Be that as it may, the brand has failed to meet expectations lately. It neglected to gain by the buyer pattern toward athleisure wear and lost piece of the pie to Lululemon (LULU), Nike and other athletic brands. Reebok represented generally 7% of Adidas’ deals toward the finish of 2020 when the organization last broke out the brand’s deals, down from about 18% in 2010, as per fiscal summaries.

“Part of the issue was a lack of clarity around what Adidas wanted Reebok to be. As a result, it was neither seen as the go-to brand for sporting professionals nor for those looking for athleisure fashion and style,” Neil Saunders, managing director of GlobalData Retail, said in note to clients Thursday.

Saunders said the obtaining was “massive” for Authentic Brands and “further cements its position as a major player in American retail.”

Reebok can possibly develop deals again under Authentic Brands on the off chance that it centers less around rivaling Nike and more on fostering a separated contribution with shoppers and a strong distribution procedure at its own stores and through external retailers, he said.

Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Chicago Headlines journalist was involved in the writing and production of this article.

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