Bags / Shoes & Accessories

On Thursday, Adidas said it had reached an agreement with Authentic Brands Group (ABG) to sell the troubled sports shoes and sporting goods brand Reebok for a maximum of 2.1 billion euros (approximately 15.96 billion yuan).

Most of the 2.1 billion euro transaction amount will be paid in cash, and the remaining transaction amount involves deferred or contingent consideration. The specific details are not disclosed. The entire transaction is expected to be completed in the first quarter of 2022.

In May of this year, the media reported that Adidas was bidding for the sale of the Reebok brand, Anta Sports and Li Ning may bid, Fila of South Korea and Wolverine of the United States are also regarded by the market as possible bidders, and financial investors such as TPG and Apollo may also join this. Battle. At that time, the market estimated that Reebok could only sell about 1 billion euros (about 1.2 billion US dollars).

In 2006, Adidas acquired Reebok for US$3.8 billion to strengthen its competitiveness with its long-time rival Nike.

But after being acquired, Reebok has been performing mediocre. Adidas performed an accounting write-down on Reebok in 2018, erasing hundreds of millions of euros from the book value, and recording its accounting book value as 800 million euros.

The reason why Adidas chose to sell Reebok may be related to the continued weak performance. During the epidemic last year, Reebok's global stores have been closed since March, resulting in a 20% drop in sales in the first nine months of 2020, and a 42.3% drop in revenue in the second quarter of last year.

According to media statistics, the revenue contributed by the Reebok brand to the Adidas Group since the acquisition is gradually declining. In 2007, a quarter of the total retail sales of Adidas came from Reebok, but in the second quarter of 2020, Reebok only accounted for Adidas. 6.4% of total sales.

ABG is an American brand management company headquartered in New York City. Its business model is "asset-light". The group has acquired Brooks Brothers, Aeropostale, Forever 21 and other well-known but bankrupt brands. At present, it has quickly accumulated 30 Several brands, selling in about 6000 physical stores, have already submitted IPO applications this year.

After the low-cost acquisition, ABG reversed the brand's poor performance through re-packaging, repositioning, cooperative authorization, expansion of categories, and internal reorganization.

ABG Chairman and CEO Jamie Salter said: "We have been following Reebok for many years and we are very happy to finally incorporate this iconic brand under our command. Reebok holds a special place in the hearts of consumers around the world, and the brand is spread all over the world. Adidas has been excellently managing Reebok. We look forward to working with the Reebok team to continue this great work and further consolidate its position as the world's leading consumer brand."

ABG said that Reebok will retain its headquarters in Boston and continue to conduct business in North America and Latin America, Asia Pacific, Europe and Russia, and maintain close cooperation with Adidas during the transition period.

As a veteran sports brand, Reebok has gone through 116 years. In 1896, a company specializing in sports shoes, "Fosters" was established in the United Kingdom, and began to manufacture suitable sports shoes for top professional athletes. This company is the predecessor of Reebok, the current international sports brand giant.

In 1958, Foster's grandson Joe and Jeff jointly founded a company. Reebok was born under the name of an African antelope. Reebok hopes that after wearing its sports shoes, consumers can run like an antelope in the vast world and fully enjoy the fun of sports.