German sportswear brand adidas has agreed to sell the Reebok unit to the US firm, Authentic Brands Group, in a deal worth US $ 2.5 billion.
Over the past few years, Brooks Brothers and Forever 21 have been added to the brand portfolio of the Authentic group – in addition to brands including Fashion retailers JC Penny and the publication Sports Illustrated.
adidas bought Reebok in 2006; however, the offloading of the ailing brand was announced earlier this year, as part of the Bavarian group’s five-year turnaround plan for increased revenues and profitability.
Boston-based brand, Reebok, was acquired for US $ 3.8 billion, with the intent of competing with the US-based rival, Nike. The brand has, however, struggled despite recent collaborations with high-profile names like Victoria Beckham, Cardi B and Ariana Grande.
Kasper Rorsted, CEO of adidas, said in a press release, “Reebok has been a valued part of adidas, and we are grateful for the contributions the brand and the team behind it have made to our country. With its change in ownership, we believe the Reebok brand will be well-positioned for long-term success.”
adidas has raised its annual earnings forecast earlier this month after a strong third quarter. A recent company statement has ensured that Reebok’s sale will not impact the financial outlook for adidas in 2022.
When the planned sale was announced in February 2021, Rorsted had declared, “After careful consideration, we have come to the conclusion that Reebok and adidas will be able to significantly better realise their growth potential independently of each other.”
“We’ve had our sights set on Reebok for many years,” said Jamie Salter, CEO of Authentic Group. He added, “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.
According to adidas, the final sale, subjected to closing conditions, is expected to go through in the first quarter of 2022.
The German retailer was founded in 1924 and is known for apparel, shoes and fashion accessories. It generated € 21.915 billion in 2018.