According to foreign media reports, German sportswear giant adidas Group will sell its subsidiary brand Reebok, with the transaction expected to be completed by March next year.
The Reebok brand was acquired by the adidas Group for $3.8 billion in 2006, a deal once hailed as "the largest acquisition in sportswear brand history." However, Reebok's development subsequently hit a bottleneck and lost momentum. Potential buyers for Reebok now include VF Corporation, which owns Timberland and The North Face, as well as China's Anta Group. Following this announcement, adidas shares rose by 3.2%.
According to reports, although adidas CEO Kasper Rorsted had hoped to sell Reebok for €2 billion (equivalent to $2.4 billion) before the pandemic, the company may now have to sell it at a lower price.
In early August this year, the adidas Group reported its second-quarter operating results. Revenue fell 34% in the second quarter, with a gross margin of 51.0%, down 2.4% year-on-year. Compared to a profit of €643 million in the same period of 2019, the company posted an operating loss of €333 million this year, with an operating margin of -9.3%. Sales of the group's main brand, Adidas, fell 33%, while Reebok fared even worse, dropping over 40%.
The good news is that the company's own e-commerce channel sales grew 93% in the second quarter, up from just 35% in the first quarter. Revenue from adidas' e-commerce business, including its own operations and partner channels, accounted for more than one-third of the company's total revenue.
Overall, adidas suffered a net loss of €286 million from continuing operations in the first half of 2020, with Reebok's poor performance being a major factor dragging down the group.