An Anta-Owned Reebok Could Be Big for Fitness in China

    Jing Daily
      Published   in Finance

    Adidas has confirmed plans to sell off U.S. fitness brand Reebok, which it purchased in 2006, as part of the German sportswear giant’s new five-year strategy (to be released in full on March 10). The Reebok acquisition was intended to expand the Adidas footprint in North America and boost its ability to compete against Nike, but it’s been a losing proposition — According to CNN, Reebok currently accounts for just 7% of Adidas’ sales, down from roughly 18% in 2010.

    Despite improvements in recent years marked by endorsement deals with mega-celebrities Cardi B and Ariana Grande, Reebok was hit hard by the Covid-19 pandemic, closing stores and failing to leverage rising demand for athletic and athleisure apparel as rival Nike did by doubling down on digital content to reach housebound consumers. The brand reported a 7% year-on-year drop in revenue in the third quarter of 2020, compared to a 2% decline for Adidas. For its part, Adidas says its current primary focus is on its core brand.

    Potential buyers for Reebok reportedly include VF Corp (owner of Vans, The North Face, and Supreme) and Authentic Brands Group, but China’s Anta Sports could emerge as a likely frontrunner.

    Anta Sports has been on a roll in recent years, and in 2019 it became the world’s third-largest sportswear company by revenue. In a notable deal, a consortium led by Anta acquired Finland-based Amer Sports, owner of an impressive portfolio of premium outdoors and winter sports brands that include Salomon and Arc’teryx, and recently installed Anta executive James Zheng as CEO, which can help to boost the profile of Amer brand’s in China.

    While Anta has moved to position itself in professional sports with sponsorships of athletes like Rajon Rondo and Klay Thompson, and has a clear presence in outdoor and winter sports gear via Amer Sports, it has yet to make major strides in the trendy sportswear and athleisure markets. With China experiencing an explosion of interest in fitness that was accelerated by the coronavirus pandemic, an Anta purchase of Reebok would make complete sense (although it wouldn’t be cheap).

    For Reebok, an Anta buyout would offer benefits such as investment by Anta into expanding the company’s retail footprint in China and a beefed-up e-commerce infrastructure. While still a longshot, an Anta-owned Reebok could very well chip away at the fitness and sports dominance of Nike and even Adidas, which would be an interesting turn of events.

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