The German group bought Reebok in 2005 in an attempt to take on arch-rival Nike in its home market. But high hopes for the label failed to materialise and years of sluggish sales and losses followed. Despite a series of restructuring plans and strategic rejigs, Adidas repeatedly wrote down Reebok's book value which was €842m (NZ$1.41bn) in 2019.
The FT reported last month that private equity firms including Permira and Triton were circling the brand which last year generated €1.74bn in sales — less than 8 per cent of Adidas' overall revenue.
In the latest turnround plan, dubbed "Muscle Up", chief executive Kasper Rorsted has tried to reposition Reebok as a brand dedicated to fitness and slashed expenses by closing underperforming stores and letting some licensing deals expire.
Adidas does not disclose the detailed financial performance of its individual brands but according to Mr Rorsted, Reebok returned to profitability in 2018 and continued to be profitable last year. However its revenue only rose 2 per cent last year, compared with a group-wide increase of more than three times that much.
Reebok sales fell 12 per cent year on year in the third quarter, compared with a drop of just 7 per cent at the Adidas brand.
- Financial Times
