Sports industryAdidas sells Reebok: Who is the new owner?

Adidas is selling its US brand Reebok to Authentic Brands Group (ABG). The American brand belonged to the company from Herzogenaurach in Franconia for 16 years. Some call what happened between Adidas and Reebok an adventure. One that is now coming to an end. Adidas CEO Kasper Rorsted, on the other hand, finds more forgiving words: "We have always valued Reebok and are grateful for the contributions that the brand and the team behind it have made to our company," he said on Thursday.

Rorsted also said that Reebok is well positioned for long-term success - but no longer under Adidas. The German sportswear manufacturer Reebok is selling for $2.3 billion. Most of the money is to be paid out in cash and distributed to Adidas shareholders. Analysts assume that the sale process will be completed by the end of the first quarter of 2022.

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Reebok has been struggling for years

Many in the industry are surprised that the purchase price is so high. In the past few months, there had been speculation about a purchase price of around one billion euros. It is interesting that the amount that Adidas Reebok is now giving is higher than the value that Reebok has in the Adidas balance sheets. Adidas bought the company 16 years ago for more than 3 billion euros. With the purchase of the US brand, the Franks wanted to get closer to the world market leader Nike.

But nothing came of the plan. The Reebok brand has been struggling for years. The share in the group's total sales has evaporated since the purchase and was still around ten percent in the end. This was also due to the fact that Adidas has strengthened its core markets in the USA and has focused less and less on the Reebok brand. Adidas' goal now is to focus even more on the actual brand and to increase profits from Adidas itself.

With Reebok, Authentic Brands Group is adding another well-known but struggling brand to its portfolio. ABG already owns 30 other brands, including Barneys New York and Brooks Brothers. Forever 21 and Sports Illustrated also belong to the group. ABG has already bought several companies this year. ABG CEO Jamie Salter said of the deal that it was an important milestone on the growth path and that his company intends to keep Reebok as a separate entity. Salter says Reebok is "one of the best athletic apparel and athletic footwear brands in the world," comparing it in importance to Nike.

The licensing business of ABG

ABG not only unites companies under one roof, the group also holds the trademark rights to Elvis Presley and Marilyn Monroe, among other things. ABG describes itself as a brand developer, a marketing company and an entertainment company. ABG buys the intellectual property of other brands or buys them outright, develops the purchased brands further and hopes to breathe life into them again through a cross-industry scale effect.

Salter founded the company in 2010 - at the same time he is a key figure with more than 30 years of management experience. He once described his business model as follows: ABG does not manage any shops, goods or supply chains. Rather, you license all of these activities - and take money for these licenses.

"We don't produce anything," says Salter. “We run a licensing business and only take care of brand identity and marketing.” In total, ABG works with more than 700 partners worldwide. The group sees itself as a flywheel of brand development. One of her strengths lies in the area of ​​social media marketing. ABG unites 230 social media accounts under one roof. She is considered a professional when it comes to branded content and digital distribution. Through the group's acquisitions, ABG brings together more than 17,000 trademarked brands. Reebok and its associated brands will soon be next in line.