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German sportswear giant Adidas is planning to sell its Reebok brand 14 years after acquiring it.
According to one report, Adidas is aiming to complete the sale early next year. Prior to Covid-19, Adidas CEO Kasper Rorsted initially planned to off-load Reebok for around $2.4 billion. The brand’s current selling price is still unknown, but the report estimates Reebok’s value to be around $995 million.
Parties that are interested in buying Reebok include VF Corp., owner of outdoor apparel brands Timberland and North Face, and Anta International Group Holdings, which owns Italian sportswear brand FILA.
Before it was bought by Adidas in 2006 for $3.8 billion, Reebok was the world’s third-largest sportswear brand. Adidas acquired the brand to go head-to-head with US sports apparel company Nike. A year after its acquisition, Reebok contributed to more than $2 billion of Adidas’s total retail sales.
In recent years, however, there has been a steady slump in Reebok’s sales. The sportswear brand closed its underperforming stores and let some brand licenses expire. Although those actions reduced the brand’s sales, they helped cut expenses even more. The brand regained profitability again in early 2019 after partnering with fitness company CrossFit and releasing new footwear products.
This year, Reebok’s profits have once again wavered because of the pandemic. While Adidas’s sales fell by 33% in the second quarter of 2020, Reebok’s revenue decreased by 42%, resulting in only $270 million in sales.