After months of reports and speculation, Adidas has confirmed its plans to divest from Reebok. A five-year strategy set to be announced in March will see Reebok either sold to another company or spun off as its own standalone brand, Reuters reports.
The process of divestment has already begun with Adidas reporting Reebok as a "discontinued operation," meaning its income will be reported separately from the rest of its operations. If Reebok is indeed sold, Reuters cites a "banking source" as saying Reebok could be worth around $1.2 billion.
When Adidas first acquired Reebok in 2006, it did so at a price of $3.8 billion. Reebok accounted for a quarter of its parent company's revenue as recently as 2017, but by last June that figured fell to just 6.4 percent. The pandemic has also been particularly brutal for Reebok, with net sales falling 44 percent in the second quarter of 2020 and another 7 percent in the third.
Is there hope for Reebok going forward? — Despite the sluggish sales figures, Reebok has made recent moves that offer promise for its cultural cache. Kerby Jean-Raymond of Pyer Moss was named global creative director in September, and Reebok's high-profile collaborators include Bape, Cardi B, Pharrell's BBC Ice Cream, and Margiela. Reebok also has strong partnerships with smaller brands like Story Mfg. — and even if they're sleepers, silhouettes including the Zig Kentica and the DMX Trail show a lot of potential.
"Reebok and Adidas will be able to significantly better realize their growth potential independently of each other," chief executive Kasper Rorsted said in a statement acquired by Reuters.
Two parties interested in seeing out that potential are Master P and Baron Davis, who've confirmed their interest in partnering up to acquire Reebok. Both have had success in the business aside from their careers in music and sports, respectively, and the latter was once signed to Reebok as a player.
It's been a long time since the Vector logo had prime placement on NBA and NFL jerseys, but if someone can revive Reebok it'll be a massive story in sneakers in sportswear.