Adidas reportedly planning to sell Reebok amid COVID-19 struggles

By: Noah M.

Adidas is looking to sell its struggling Reebok business after holding onto the American sneaker brand for more than a decade, reports said.

The German sportswear giant has set up an internal team to pursue the sale and aims to close a deal by March of next year, when CEO Kasper Rorsted plans to present a five-year strategy for Adidas, according to Germany’s Manager Magazin.

Adidas had hoped to get 2 billion euros (about $2.4 billion) for Reebok before the coronavirus pandemic, but Rorsted may now settle for a lower price, the publication reported without saying where it got its information. Interested buyers reportedly include VF Corp., the apparel conglomerate behind Vans and The North Face, and Chinese sportswear firm Anta Sports.

But an internal review of whether to dump Reebok is still in its early stages, and Adidas will decide in the coming months whether to move forward with a sale, Bloomberg News reported, citing a person familiar with the matter.

An Adidas spokesperson said the company does not comment on “market rumors.” The reports sent its Frankfurt-listed stock price up as much as 3.5 percent Thursday to 284.20 euros ($335.97).

Adidas bought Boston-based Reebok in 2005 for $3.8 billion in a bid to better compete with American rival Nike. Rorsted said last year that he hoped to grow Reebok’s sales with new footwear lines after it returned to profitability, according to Bloomberg.

But the COVID-19 crisis hammered Reebok especially hard given the brand’s higher exposure to the US market, Adidas has said. Its revenues plunged 42 percent in the second quarter, compared with a 33 percent drop in Adidas’s overall sales.

Adidas also wrote down Reebok’s book value by almost 50 percent last year to 842 million euros, or $995 million. Rorsted said in March that Reebok’s role in the company’s portfolio would be addressed in the new Adidas strategy that will be rolled out next year.