Adidas is selling Reebok after defending the $3.8 billion purchase for years
Adidassaid Tuesday it plans to divest from its Reebokbrand.
- The German company bought Reebok in 2006 for $3.8 billion, but Reebok's sales have fallen since.
- Adidas plans to focus its efforts on its core brand.
German apparel company Adidas is preparing to offload its struggling Reebok brand, the firm announced Tuesday.
Adidas acquired Reebok in 2006 for roughly $3.8 billion in an attempt to better compete with Nike, but the brand has posted disappointing sales figures in recent years. Adidas said Tuesday that it has begun a formal process to divest from Reebok, pivoting to focus on its core brand."After careful consideration, we have come to the conclusion that Reebok and adidas will be able to significantly better realize their growth potential independently of each other," Adidas CEO Kasper Rorsted said in a statement. "We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it."
Reebok in recent years had tried to position itself as a go-to for highly athletic individuals with high-profile partnerships in UFC and Crossfit.As recently as 2017, Rorsted had defended parent Adidas' decision not to sell the brand.
"We are not going to sell Reebok because we are still very confident of the strategic position of the brand," Adidas CEO Kasper Rorsted told a meeting of investors that year. "We are convinced the measures we are taking are going to be successful."Read more: StockX insiders say the resale platform is planning for a 2021 IPO. Here are 6 other marketplace platform that experts predict could go public soon. In 2007, the year following Adidas' acquisition of Reebok, the latter accounted for roughly a quarter of Adidas' total
Bloomberg reported that Adidas was looking to sell Reebok back in October.
A banking source told Reuters Tuesday that the brand could be worth around $1.2 billion, meaning Adidas could take a more than $2 billion hit on the sale.
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