German sportswear company Adidas plans to sell its underperforming Reebok brand – some 15 years after Adidas acquired the Boston-based brand to help it compete in the American market.
Adidas acquired Reebok in 2006 for roughly $3.8 billion in an attempt to better compete with Nike, but the brand has posted disappointing sales figures in recent years.
Company said Tuesday that it has begun a formal process to divest from Reebok, pivoting to focus on its core brand. “After careful consideration, we have come to the conclusion that Reebok and Adidas will be able to significantly better realize their growth potential independently of each other,” said Adidas CEO Kasper Rorsted in a statement.
“We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it,” he added.
A banking source said the business could be worth around 1 billion euros ($1.2 billion).
The brand could be spun out into an independent company, or sold to another retailer, group or private equity. According to Reuters, the brand’s recent collaborations with celebrities like Cardi B and focus on women’s apparel put it in a good position.
In the meantime, Adidas managed to eat into Nike’s dominance in the United States with its core brand, helped by partnership with celebrities like Kanye West, Beyonce and Pharrell Williams. Reebok in recent years had tried to position itself as a go-to for highly athletic individuals with high-profile partnerships in UFC and Crossfit.
