Footwear Insight

THE FOOTWEAR EYE Authentic Brands Group Reels in Reebok ACQUISITION By Bob McGee A fter more than a year of speculation, Reebok was finally sold last month by adidas Group. New York- based Authentic Brands Group, which owns 30 iconic brands across nine segments in its portfolio, agreed to acquire Reebok from adidas Group for $2.46 billion in a deal that's expected to close in Q1/2022. The Three Stripes acquired the Vector brand for $3.8 billion in 2005 and has been actively seeking a buyer for Reebok since Feb. 2020. What does it mean for Reebok? In ABG, which filed for an initial public offering on July 6, Reebok gets a new parent with a dif- ferent business model that could help fuel a resurgence for the label worldwide. Reebok's annual sales declined 20 percent in FY20. Reports suggest the company will retain its Boston Seaport headquarters and President Matt O'Toole under ABG ownership. Canadian Jamie Salter, who founded ABG in 2010, called the Reebok acquisition "an important milestone" in the company' growth, adding, "We are committed to preserving Reebok's integrity, innovation and values-in- cluding its presence in brick and mortar." Among the largest shareholders in Authentic Brands Group are Leonard Green & Partners, General Atlantic and Lion Capital. The com- pany generated $489 million in revenue in FY20 and has adjusted EBITDA of $373 million, with some circles suggesting its valuation could hit $10 billion after the IPO. ABG's business model for its nine segments — luxury, fashion, street, active/outdoor, home, entertainment, living legends, media content and events/experiences — is licens- ing-based and poses less inventory and other risk to the firm. Reebok will be the fourth and biggest footwear brand in the portfolio, joining Tretorn, Airwalk, and Prince. In the sports/ outdoor/apparel area, ABG also owns Spyder, Vision, Eddie Bauer, Volcom and Tapout. Licensee and channel partners of Authentic Brands Group are re- sponsible for sourcing, pricing, inventory man- agement, stores, and product design with ABG holding the rights of approval. It is a formula that could help the Reebok brand swim upstream again in numerous global markets. n Reebok has a new owner. In ABG, Reebok gets a new parent with a business model that could help fuel a resurgence for the label worldwide. 8 • Footwear Insight ~ September/October 2021 footwearinsight.com

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