What Happened: On February 16, German sportswear maker adidas announced plans to sell or spin-off its Reebok brand. According to Reuters, adidas said that it will report the underperforming label as a discontinued operation from the first quarter of 2021. CEO Kasper Rørsted said in a statement that “Reebok and adidas will be able to significantly better realize their growth potential independently of each other.” However, he emphasized that Reebok possesses “highly attractive” long-term growth opportunities in the sportswear market, opening it up to potential buyers globally.
Jing Take: Rumors that Reebok was on the chopping block first surfaced at end of 2020, so this comes as no surprise. According to the previous financial report of the Adidas Group, Reebok’s revenue in the second quarter of 2020 fell a whooping 42 percent due to the COVID-19 pandemic. But despite Reebok’s less than ideal financial results, the brand’s recent collaborations with celebrities like Cardi B and focus on women’s apparel helped maintain the struggling brand in a solid marketing position. Additionally, its Weibo video staring the former American basketball player Shaquille O’Neal, as well as its newly released Chinese New Year collection, received positive feedback from users.
CNN previously reported that aside from the VF Corporation (the parent company of Vans and The North Face) and Authentic Brands Group (ABG), China’s Anta Sports could be a strong potential suitor for Reebok. Considering Reebok’s solid reputation in China, it’s not unreasonable to imagine Anta scooping it up, especially with its history of acquiring Fila’s Greater China business in 2009, Sprandi in 2015, and the outdoor brand Arc’teryx in 2019.
While China has managed to seemingly overcome the vast economic devastation brought on by COVID-19, much of the rest of the world — including most foreign brands — continue to suffer from the ongoing pandemic. Perhaps this gives the edge to Anta, if it is indeed interested in adding another sports apparel brand with global prestige to its ever-increasing roster. It’s a buyer’s market.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.