New Delhi: German sportswear company Adidas is preparing to sell its famous shoe brand Reebok. The performance of this brand has not been doing well for some time. Adidas said that it has started the formal process of selling Reebok. Adidas has prepared a 5-year plan for growth, which will be introduced on March 10. On the same day, the company will also release its results for 2020. According to the information, the company will stop functioning Reebok from the first quarter of 2021. A banking source told CNBC that Reebok’s business is worth $ 1.2 billion.
Investors were constantly demanding to sell Reebok
Adidas Chief Executive Kaper Rorsted has said that Reebok and Adidas can separate and achieve better growth. In 2006, Adidas bought Reebok of Boston for $ 3.8 billion, but due to its weak performance, investors were constantly seeking to sell it. Meanwhile, Adidas was able to buy a stake in Nike in the US through its core brand. The company has also partnered with Kanye West, Beyonce and Pharrell Williams, which has benefited well.
Roasted tried to get Reebok back on track
When Roasted became CEO of the company in 2016, he planned to bring Reebok back on track. This also increased Reebok’s profitability, but its performance was consistently weak. It also affected Adidas. Meanwhile, the situation caused by Coronavirus also weakened the company’s business. In the third quarter of 2020, Reebok’s net sales fell 7 percent to 403 million euros. In the previous quarter, the company’s sales had fallen by 44 percent. In 2019, Adidas had reduced the book value of Reebok in 2019 by almost half that of 2018 to 84.20 million euros.
