According to news on May 6, sporting goods stocks rose, with Li Ning rising by more than 4%, Xtep rising by more than 3%, Taobo rising by more than 2%, and Anta rising by 2.01%.
Some media quoted sources as saying that sporting goods manufacturer Adidas has begun selling its Reebok brand and expects China’s Anta Sports and Li Ning to submit offers. Adidas acquired Reebok for $3.8 billion in 2006, but currently expects to sell Reebok for only about 1 billion euros (about $1.2 billion).
Some media quoted sources as saying that sporting goods manufacturer Adidas has begun selling its Reebok brand. Adidas has requested to submit the first round of bidding next week and expects China Anta Sports and Li Ning will submit bids, and Wolverine of the United States is also considered by the market as a possible bidder. In addition, financial investors including TPG Capital, Sycamore, Cerberus and Apollo may also join the competition because they are optimistic about the potential for Reebok’s performance to improve. Reebok is expected to post a loss this year, with core profit expected to grow only “slightly” next year.
Adidas acquired Reebok for US$3.8 billion in 2006 with the intention of competing with Nike. However, the brand value has been greatly reduced so far. Reebok is currently expected to sell only about 1 billion. euros (approximately $1.2 billion). In addition, Adidas conducted an accounting write-down on Reebok in 2018, erasing hundreds of millions of euros from its book value and recording its accounting book value as 800 million euros.
Relevant reports indicate that the reason why Adidas chose to sell Reebok may be related to continued weak performance, because Reebok was acquired by Adidas for US$3.8 billion in 2006. The group’s performance has been mediocre since the acquisition. During the epidemic last year, Reebok’s global stores were closed one after another since March, resulting in a 20% drop in sales in the first nine months of 2020. Revenue in the second quarter of last year was even greater. fell 42.3%.
In addition, some media also reported that the revenue contributed by the Reebok brand to the Adidas Group since the acquisition has been gradually declining. In 2007, a quarter of Adidas’ total retail sales came from Reebok. However, by the second quarter of 2020, Reebok only accounted for 6.4% of Adidas’ total sales.
In addition, Adidas is still boycotted in China because it is involved in the Xinjiang cotton controversy. This may become a factor for Chinese buyers to consider and even affect the sales price. According to reports, the organizers of the Shanghai Half Marathon held in mid-April this year temporarily announced on the eve of the start that they would not provide participants with T-shirts with adidas on them and would refund part of the money to the participants. The organizer did not explain the reason, but it is generally believed to be due to the Xinjiang cotton issue.
In addition, Adidas is the clothing sponsor of many Chinese talent shows this year. Therefore, in April, TV stations also used mosaics to cover up the brand trademarks on contestants.
As for the above rumors, Adi and other parties have not responded yet.
As early as December last year, there were market rumors that Reebok might be sold by Adidas. At the time, CNN quoted a statement issued by Adidas saying that it was evaluating “strategic options” for Reebok when formulating a new five-year strategy, including selling Reebok and continuing Reebok as part of the company. . On February 16 this year, Adidas announced that it had completed its evaluation. As part of its new five-year strategy, Adidas decided to officially launch the process of divesting Reebok. It is expected that starting from the first quarter of this year, Adidas will no longer announce Reebok’s performance. Report.
Adidas CEO Kasper Rorsted said at the time: The long-term development opportunities in the sports industry we are in are extremely attractive, especially for iconic brands. For sports brands. After careful consideration, we believe that adidas and Reebok will be better able to realize their respective growth potential as two independent brands. We will be working hard over the next few months to ensure the long-term success of the Reebok brand and its team.
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Once the third largest in the world The history of Reebok, a major sports brand, can be traced back to 1895. Joseph Foster from Bolton, England invented a spiked running shoe, which was also the world’s first spiked shoe. Subsequently, he and his sons established a specialized company, which was the predecessor of Reebok, “Foster’s”.
In 1958, Joseph’s two grandsons Joe and Jeff jointly founded Reebok, which made a splash in the British market. In the early 1980s, Reebok airdropped itself to the United States through an international sports shoe trade show.
Since then, the competition between Nike and Reebok has become the main theme of the American sporting goods market in the 1980s and 1990s. At that time, Reebok had set many “world firsts”: the first pair of spiked running shoes, the first pair of inflatable sneakers, the first pair of sneakers designed specifically for women… It even defeated the 1987 Nike has occupied the top spot in the U.S. sporting goods market for three years.
But the good times did not last long. In 2005, in order to compete with Nike, which had a far leading global market share, the second-ranked Adidas acquired the third-ranked Reebok, which was the bane of a lose-lose situation. Just bury it.
According to Jiemian News, before the acquisition, Reebok held the NBA, NFL (U.S. NationalEquipment sponsorship contracts for the three top competitive sports events in North America: the National Football League) and the NHL (North American National Hockey League).
In 2006, Adidas bought the company.
Allowing your former competitors to seek development for you is even less credible than “your parents will help you keep your lucky money.”
With the “protection” of contracts from the three major leagues of NBA, NFL and NHL, Reebok firmly occupied the third position in the American sports market more than ten years ago. But after the merger, Adidas took away Reebok’s NBA and WNBA jersey sponsorship rights. In 2010, due to the decline in Reebok’s performance, the NFL contract was won by Nike. In 2015, Adidas took it from Reebok again. Gone the last big contract – NHL.
According to China Business News, in 2014, Reebok changed its LOGO and track, focusing on the fitness market. In the eyes of the outside world, this is to avoid distinguishing itself from Adidas and find another way. But this fitness track is not easy to follow. Undet Armor has already emerged in the United States and is very popular. Even in emerging sports markets like China, it is difficult for people to find Reebok among mainstream players.
Reebok has gradually become a burden that Adidas has “too big to lose”.
According to The Paper, despite the poor performance, in fact, since Adidas CEO Kasper Rorsted took office in 2016, his management of the Reebok brand has The development under the Adidas Group still puts forward a positive view, and has repeatedly stated its determination not to sell Reebok. At Adidas’ annual meeting in 2017, Rost also publicly expressed Reebok’s profit target, hoping that Reebok could turn a profit in four years and achieve the same profit margin for the Reebok brand and Adidas’ parent company in 2020. .
In order to achieve this goal, in the following years Reebok not only established partnerships with well-known British customization brands such as Huntsman, but also established partnerships with designer Victoria Beckham Beckham collaborated. In terms of brand image, Reebok invited “Game of Thrones” actor Nathalie Emmanuel, “Wonder Woman” actor Gal Gadot, and model Gigi Hadid (Gigi Hadid) and others serve as image ambassadors to increase the brand’s visibility among female consumers.
These efforts are effective. Reebok lost more than 150 million euros in 2016, but returned to profitability in 2018, completing its goal two years earlier than Rost expected. </p
