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Adidas Boss Rorsted puts pressure on Reebok

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today Dec 18, 2016
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Adidas CEO Kasper Rorsted is putting pressure on the US subsidiary Reebok, which is weakening in the domestic market. He also wants to boost Adidas's entire North American business to catch up to the competition. 

 


"The Reebok team in Boston will focus on its own business going forward. If that works as planned, Reebok will remain part of the family.” - adidas

 

“It is clear that Reebok has to improve significantly,” Rorsted told the Handelsblatt German business newspaper. Reebok has in fact posted growth the past 15 quarters, but only outside of the US domestic market.

The group had thus decided to completely disconnect the US brands such as Reebok and Adidas from each other, said Rorsted. "The Reebok team in Boston will focus on its own business going forward. If that works as planned, Reebok will remain part of the family.”

Adidas purchased Reebok in 2006 and has been trying to establish it as a fitness brand ever since. However, the transition has not been smooth, to the point that Rorsted’s predecessor Herbert Hainer repeatedly had to endure questions of whether or not Reebok was a bad buy.

The new CEO Rorsted, who came on board in October, has also inherited a detailed multi-year 2020 strategy for the brand’s revamp, a plan he intends to adhere to, he told the German newspaper. Rorsted is especially concerned about turning around the North American business, where the group has fallen behind the competition, although it recently made some gains and has made heavy investments.

More money will be spent going forward. “This over-investment is simply necessary to close the gap with Nike and facilitate amped up growth there,” said the executive. Adidas is currently doing well and is growing faster than other brands, but overall the process still demands patience.

The planned sale of golf equipment business has not yet been completely finalized. Hainer had initiated this process. According to Rorsted, the sale is proceeding, but he did not provide any details. He believes that golf clubs do not fit with the DNA of Adidas.

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