As reported by many business newschannels, Adidas is to sell Reebok brand to focus on its core business.
Acquired by the German group in 2005 for $3.8 billion, Reebok, according to business analysts, is now worth less than half that sum. The shrink began quickly some years after the acquisition, although a recent turnaround put the brand back to profit in 2018, the main reason being a brand strategy aimed to recover Reebok heritage and 80’s and 90’s vibes. A new focus on archive models and the usage of fashion and pop culture ambassadors instead of sports professionals has boosted Reebok’s relevance.
Among the potential institutional buyers like VFCorporation and Permira, the duo represented by rapper and businessman “Master P” and former NBA all-star Baron Davis stands out for its passion: their combined bid for Reebok announced in December is clearly aimed to make the brand cool again and “black owned”. A social and cultural (albeit business driven) opportunity that Davis and Master P are leveraging to build a community of devoted black-conscious fans, through a brand which can open numerous opportunities of collaborations, empowering the links between sneakers/streetwear scene and the pervasive rap-black pop culture.
On the opposite side stands Authentic Brands Group, another buyer among the institutional prospects. The licensing powerhouse would manage Reebok as a 100% licensed global brand extension including it in its fat roster of 50 brands, which ranges from celebrities like Elvis and Marilyn Monroe, publishing like Sports Illustrated, or brands like Juicy Couture and Volcom, up to Brooks Brothers and Barney’s.
A variable could add up to the Authentic Brands Group offer – the interest of Shaquille O’Neall, who also would buy Reebok for a potential return to the basket court, where the brand belongs. O’Neall is one of the “celebrity-brands” managed by Authentic Brands Group, and a co-managed scenario by the two parties could grant a bit of authenticity to the recipe linking the brand to its basket heritage.
How it always happens with acquisitions, Reebok’s fate will be in the hands of its future owner, but this dramatic polarization between opposite business models and strategies gives a new light and gets the negotiation spicier.