Adidas sells Reebok to the owners of Forever21

Silver Larrosa

The German sportswear company Adidas has reached an agreement with the American Authentic Brands Group (ABG) to sell Reebok by 2.500 million dollars (2.100 million euros).A good part of this amount will be paid in cash and the transaction will be closed in the first quarter of 2022, after the approval of the competent authorities.ABG has the fashion brands Jcpenney, Forever21 and Brooks Brothers.

The news was received by the bag with climbs.The price of adidas shares at the close of the market increased 2.34% this Friday.Adidas bought in 2006 Reebok for 3.100 million euros, with the aim of competing in the United States with Nike.Analysts consider that despite the removal of Reebok adventure ends for Adidas with little impact on the accounts since the brand is barely valued at 803 million euros in the group's balance, after several accounting depreciations recorded at the end of 2020.

Reebok's income grew by 2% in 2019, until 1.750 million euros, small part of the 23.600 million euros in turnover of the entire adidas group.Therefore, the sale of Reebok will not have an excessive effect on Adidas's financial forecasts for this year.

At the time of purchase, Reebok was an undoubted projection brand and image capable of competing with Nike, but the entry of the German multinational deflated those expectations.With the current sale, the remuneration to the Shareholders of Adidas could increase.Before knowing the Reebok operation, the markets expected a dividend distribution of about 1.000 million euros in 2021.

Earlier this month, the sports team manufacturer raised its annual forecasts despite supply difficulties, especially in Vietnam, but registering a good second quarter.From April to June, the net profit of the group reached 397 million euros, compared to losses of 295 million from the same period of 2020, in full pandemic.

"We always appreciate Reebok and we are grateful for the contribution of this brand and its team to our company," said Adidas, Kasper Rorsted in a statement.The German group now wants to focus on the strengthening of the Adidas brand, he explained."It is an honor that has been entrusted to us the continuity of Reebok's legacy," said Jamie Salter, founder and president of ABG.