Adidas wants to get rid of the Reebok brand

German sportswear manufacturer Adidas wants to get rid of the Reebok brand, which is failing. The German concern bought the American brand 15 years ago to help it in the US market in the competition with Nike. Adidas has decided to start a formal process aimed at dividing Reebok, the German company said. The sale or spin-off is part of a 5-year strategic plan that Adidas will present on March 10, along with the announcement of its 2020 results.

Unconvincing results

According to a bank source, Reebok may be worth around one billion euros. "Reebok and Adidas can realize their growth potential significantly better when they are independent of each other," said Adidas boss Kasper Rorsted. Adidas bought Reebok in 2006 for $ 3.8 billion (€ 3.13 billion). Investors have repeatedly demanded the sale of the brand for its unconvincing results.

The recovery plan didn't help

After joining the group's headquarters in 2016, Rorsted launched a recovery plan for Reebok, which helped the brand return to profitability, but its performance still lags behind the core Adidas brand. In the third quarter of 2020, Reebok's sales fell by 7 percent to 403 million euros, falling by as much as 44 percent in the previous quarter due to the pandemic. In 2019, Adidas reduced the value of Reebok by almost half compared to 2018 to 842 million euros.