Sports Insight

July / August 2019

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6 • Sports Insight July/August 2019 W ith a new team, new offices and a fully redesigned digital strategy, Reebok is ready to open the aperture. at's the message from brand president Matt O'Toole. And by continuing to focus on the intersection of fitness and everyday style, he says, Reebok has a road map to capturing even more share. "e traditional thinking in sport was [there was] stuff you make for sport, stuff you make for the gym, and stuff you go out in at night to look cool. And that whole model is not the way the consumer is living," O'Toole said. "e consumer is saying, it's all one thing to me, I'm seamlessly moving from the gym to the rest of my life. at's really what we see as the opportunity for the Reebok brand: bringing the healthy lifestyle business and our heritage together with what's new and what's next for the fitness world." Adidas Group CEO Kasper Rørsted affirmed that growth was the Adidas Group's no. 1 priority for Reebok in the Q1 call with analysts in May. "Despite the fact that we made a lot of progress on Reebok profitability and an- nounced a profitable Reebok for 2018, we still need to drive growth back into Reebok: at is the ultimate target we have set for 2020," he said. In the first quarter, Reebok sales decreased 12 percent, but the brand saw growth in its Classics business and gross margin increases. Rørsted said that in 2018 Reebok had spent more as a percentage of sales than its parent brand, and confirmed that it would again in 2019. Market watchers said the brand was well-positioned to capitalize on today's fashion trends — but cautioned that the fitness space has challenges. NPD analyst Matt Powell noted that Reebok's growth, at 9 percent last year, outpaced the industry. And while the mar- ketshare is small — the brand has less than 1 percent marketshare, per NPD — the consumer is actively looking for less-dis- tributed brands. "ey're on the right track on Classics, and we're very much in a Classics mode right now," he said. "ere's no sign retro is slowing up, and the consumer has shied away from big brands to smaller ones." e struggle, he said, will be in shoppers attitude toward fitness products. "e consumer today is focused on health and wellness, but they're not as serious as they were, and they're not buying activity specific footwear: they're looking for a general shoe to wear," he said. But O'Toole said Reebok has a clear path forward on product, and aer establishing its bona fides in performance, the brand can fill in its product line. "What we purposefully did in the be- ginning was say, we've got to lay down our credentials in fitness," he said. "Our job now is to backfill under that to make it more ac- cessible and use our history and some of our iconic models as some of that storytelling." A critical element will be continuing to expand and grow the brand's partnerships, like the ones with rapper Cardi B and model Gigi Hadid or ones such as its partnership with Crossfit. In July, Reebok announced that it was making Pyer Moss' Kerby Jean- Raymond the artistic director of a new collection of collaborations called Reebok Studies___. e same month, the second collection of sportswear and sneakers from B Y J E N N I F E R E R N S T B E A U D R Y Matt O'Toole discusses digital efforts and blending sport with style. Reebok Aims for Growth IN THE MARKET Matt O'Toole, president, Reebok. Reebok Nano 9 Crossfit shoes

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