Reebok trips up adidas

Adidas-Salomon, the world's second-largest maker of sporting goods, has had an unexpected fourth-quarter loss and says sales at the newly acquired Reebok International unit in the US will tumble this year.

The net loss was €4 million ($7.2 million), compared with net income of €20 million a year earlier, adidas said yesterday at its Herzogenaurach, Germany, headquarters.

Analysts expected a profit of €5 million. Reebok's revenue will fall about 5 per cent in 2006 after orders at the end of the quarter sank 22 per cent, the company said.

Chief executive Herbert Hainer said he aims to stabilise Reebok, adding new products to keep it a "performance," not a discount, brand.

Hainer paid US$3.8 billion ($5.7 billion) for Reebok last year to double adidas's share of the US market and narrow the gap with Nike. Retailers, including Foot Locker, cut orders because of apprehension about the purchase and Reebok's out-of-style Classic line.

Hainer said Reebok would remain a "performance" brand, dispelling speculation that the company wanted to position Reebok as a lower-price brand to distinguish it from the German parent.

- BLOOMBERG