TL;DR (2-minute read)
- Adidas sold Reebok for $2.5 billion after buying it for $3.8 billion sixteen years ago
- Reebok has seen a decrease in popularity and revenue in recent years, with 2020 being its worst in recent years, with only $1.6 bilion in sales (compared to $2.3 billion when bought by Adidas in 2006).
- Authentic Brands Group (ABG) owns many other popular brands, such as Aeropostale, Brooks Brothers, Forever 21, and Izod, and is valued at an estimated $10 billion.
- Reebok hopes to make a comeback by mainly focusing on selling in wholesale stores like Walmart since other sportswear brands have removed their product in these stores.
Adidas, the major sportswear company, has just sold off Rebook to Authentic Brands Group for $2.5 billion after owning the company since 2006. This is much lower than the $3.8 billion that Adidas bought Reebok for. Adidas stated that it sold off the company in order to focus on itself.
Ever since Adidas bought Reebok, the company hasn’t had a year where they raked in more revenue than before they were sold. The highest they got in revenue was in 2006 when they made about 2.331 billion dollars. The lowest they made in revenue was in 2020 when they made about 1.659 billion dollars.
Although Reebok hasn’t performed as well in recent years, Authentic Brands Group (ABG) CEO Jamie Salter has stated “We (ABG) have had our sights set on Reebok for many years, Reebok not only holds a special place in the minds and hearts of consumers around the world, but the brand also has expansive global distribution.” Authentic Brands Group owns many major name companies like Aeropostale, Brooks Brothers, Eddie Bauer, Forever 21, Izod, and Volcom. Though we don’t know the value of ABG because it hasn’t gone public yet, it is estimated that the value of ABG is around $10 billion.
Reebok hopes to make a comeback in popularity and revenue due to the falling of both in recent years. The company believes that ABG can help them accomplish this by letting Reebok continue what it has been doing before but also employ different marketing strategies from before. One way that Reebok plans to do this is by selling in wholesale stores like Walmart because other major footwear brands have decided to discontinue selling through retailers to focus more time and money on directly selling to consumers. ABG is a good fit for Reebok because ABG has a lot of experience devising plans so that their companies can sell in wholesale stores.