Reebok's European director: “We don’t want to copy Adidas’s strategy”
Reebok is once again on the rise, having strongly improved its profitability in 2019. The brand recently announced that it would be returning to its historic logo, the Vector, while also signing collaborations with Victoria Beckham and the designer of Pyer Moss’s menswear, Kerby Jean-Raymond. For six months now, Thibault Durand has been Reebok’s European brand manager (EMEA). In an interview with FashionNetwork.com, he discussed Reebok’s evolution and revealed his ambitious projects for the brand, centered on strong partnerships and core products.
FashionNetwork.com: Kasper Rorsted, Adidas’s CEO, made it clear when he arrived two years ago that he wanted to improve Reebok's results. Where are you today?
Thibault Durand: It’s been done. The brand is profitable. The plan we put in place to improve Reebok’s results was called “Muscle Up,” and Reebok is currently contributing to the group’s profits. We broke even a while ago and have seen significant increases over the last two trimesters.
FNW: Now that Reebok has broken even, the recurring rumors concerning the brand’s sale will resurface. How are those rumors perceived internally?
TD: I can’t comment on what I don’t see. But when I think of Kasper and the board’s ambitions for Reebok, along with what Reebok brings to the group, I’m not persuaded that the group will go in that direction. We had some big goals in 2019, and we have big projects for 2020 as well.
FNW: The change has been pretty radical. A lot of work has been done on the American retail network. What has been done, concretely, on the European side of things?
TD: The American and European markets are diametrically opposed when it comes to distribution, product typology, etc. We wanted to focus on the fact that the European consumer could now find what had previously attracted him about the label. This initiative was part of our strategic plan called “Creating the new,” which will end in 2020. One of our three main pillars was that our sales must outgrow our expenses. We were only able to achieve this by focusing on what’s most important.
FNW: What do you mean by that?
TD: The objective remains the same, to be “the best fitness brand in the world.”
In Europe, "fitness" usually means working out at the gym. So it's not that. It’s more like basketball, or even skateboarding. Everyone likes to skate, but we aren’t all riding skateboards all the time. It’s more than that: it’s a philosophy, a way of seeing and doing things. This kind of fitness refers to everything that we do that makes us feel good in our bodies.
I mentioned basketball because today, 90% of the business in that industry is achieved with off-court products, and not those worn by players during the game. The same idea applies to us. We want to democratize this idea of wellbeing. Womenswear has always represented an important sector for us.
FNW: What are Reebok’s European perspectives?
TD: I can’t go into details. In 2018, the brand’s global revenue was at 1.69 billion euros. Reebok’s goal is to increase this number in 2019 and 2020. This will necessarily mean a strong increase across our European markets. We have eight different clusters. Among them, the three most important ones are the United Kingdom, France and the Germany-Austria-Switzerland cluster. The five others are the Nordic countries, Eastern Europe, Southeast Europe, Italy and Portugal-Spain, which are all different. Certain markets will place more of an emphasis on lifestyle, whereas others will focus on performance.
FNW: How many people are assigned to this zone?
TD: About 170 people are assigned to Reebok in Europe, with 130 people in both Amsterdam and Herzogenaurach, working on merchandising and activation. We also have around 20 to 30 people working out of Barcelona in our Creation Center, as developers, product managers and designers. The accessories team is also based there.
FNW: Over the last couple of quarters, what has driven the rise in profitability?
TD: Our mantra has been to make a profit without affecting the value perceived by the consumer. We have notably revised our pricing architecture. As a challenger brand, our job is to get consumers to choose Reebok because the price is right, the design is well-constructed and the quality-to-price ratio is attractive. Our strategy is built around “Icons,” specifically consisting of six sneaker models. They’re the backbone of our product range and we must get them right each and every time.
FNW: Is Reebok’s strategy different from Adidas’s?
TD: Reebok must create its own story. Kasper Rorsted has made that clear. We can’t just copy-paste Adidas’s model and downgrade it a bit. Adidas in one of the leading brands and we’re on a different level, among those challenging it. We’re not afraid to admit that, we own it. It’s a different state of mind, whereas we are more responsive and agile, ultimately able to do things others cannot. Adidas isn’t a competitor. If we were fighting to take market shares from the two biggest brands, we would be in the wrong fight.
FNW: At Reebok, lifestyle is made up of both Classics and performance. Will these two pillars be kept in place, or are you thinking about bringing these together?
TD: The goal is for these two worlds to work together, joining to make one single voice. The first step towards this was the replacement of Delta (launched for performance in 2012) with Vector, one of the most recognized logos worldwide. This allows us to mix sports, athleisure and lifestyle all together. Nano, for example, is the number one sneaker for crossfit. By using Vector, we are able to emphasize that this shoe isn’t solely meant for indoor sports. It can also easily be worn with a pair of jeans.
FNW: And what are the growth drivers at Reebok?
TD: Lifestyle is obviously the most important contribution to our economic activity. There’s a big difference in terms of the consumer’s perception of the product and what it was intended for. A great deal of leggings are worn outside of the gym now. And that’s where the market is heading. However, we will never abandon our athletic origins. But this does enter into the strategy for our “Icon” products.
FNW: What is this strategy?
TD: Footwear remains at the core of our business, with six models in particular: Club C, Classic Leather, Zig, recently launched with Ian Paley, Floatride, Nano and InstaPump Fury. They speak to consumers at different times of day.
FNW: The idea was to avoid several launches?
TD: The idea is to bring the “Icons” up to date, while still tapping the nostalgia of 35-40 year olds and offering a certain novelty for teenagers. Classic Leather and Club C are two excellent models in the lifestyle collection. The CL Legacy 83 collaboration with Gigi will also be launched in the fashion collection.
For fall 2020, we are bringing the CL Legacy, which is an updated version of the Classic Laser for people between 15-25 years old. It will be the back-to-school sneaker. In parallel with this, we noticed that there are a lot of archives from the 70s, 80s, 90s and 2000s at the headquarters in Boston. The question is “How do we achieve a sure-footing for tomorrow?” And this retro-running element from the '70s is certainly coming back in style. Hopefully, this will be the case with the Aztec, a great sneaker model, and a second one that will be reissued in March under the name Aztec Princess.
FNW: What is the lifespan for a Reebok product? Adidas’s Stan Smith has peaked since it’s been reissued. Even if its success isn’t what it used to be, these numbers remain quite compelling. How have you handled the cycle of your products?
TD: There’s no simple answer to this question. It terms of lifespan, what we want to avoid is having a high-quality product on the market at a time when it would be overburdening it. The goal is to play with different products and their various iterations, achieving a continuous dynamism. This is part of the advantage of being in the Adidas group, since there are interesting strategies that we will be able to borrow. However, we contribute to this by refusing to use PVC and by following two creeds: 'regrow' and 'recycle.' Regrow pertains to how we actually make the shoes with naturally grown materials, as was done with the Floatride. And recycle is what we intended by the Zig sneaker model.
FNW: Footwear represents a major part of your business strategy. But what about apparel?
TD: Compared to other brands, apparel has a significant role at Reebok. What’s interesting, however, is the balance we’ve struck between women’s and men’s. It is becoming clear that we perform equally across both collections and the Victoria Beckham collaboration has highlighted what we were doing. It’s important to feature the collection across different distribution networks. The third season will be released in early February and we’re hoping to make it one for the books.
FNW: What is the pace for the Studies project you’re working on with Kerby Jean-Raymond?
TD: Reebok Studies was started to find the designer of tomorrow: the next person who would revolutionize the brand. At one point in time, Reebok would house emerging artists at the very start of their careers. Our goal today is to work with the designers of tomorrow. We had already been working with Kerby when he suggested this project. The collaborations aren’t determined ahead of time. If we had it all planned twelve months prior, it would become extremely difficult to adjust to the expectations of our customers. What we’re looking for, whether it be in London or Paris or during fashion weeks, is the next designer in the making, such as Kerby.
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