German sportswear company Adidas is considering a possible sale of the collapsed US company Reebok.
On Monday, Adidas announced that during the preparation of the new five-year strategy, it is expected to discuss whether Reebok will remain within the group or to discuss available alternatives.
According to the German news agency, the company added that a decision on the possible separation and the new strategy is expected to be announced on March 10.
And the American “Reebok” has been under restructuring for years, and media reports said early last month that German “Adidas” intended to sell Reebok.
Adidas was unable to live up to the high expectations that awaited it from its US company’s acquisition in 2006.
Adidas acquired Reebok in 2006 and turned it into an affiliate, with each company continuing to operate under its own brand. Adidas acquired all of the Reebok premium shares to complete the $ 3.8 billion deal.
Thanks to the Reebok restructuring plan’s success known as “Strong Yourself” that began in 2016, the brand improved its profitability significantly. According to the restructuring plan, it returned to the earnings territory in 2018, two years before the target date.
In 2019, Reebok also returned to growth, thanks to its growth in its home market in North America and the world, as the company’s sales increased by 2% with neutralized exchange rates compared to its sales in 2018.
And at the beginning of this month, the German sports equipment company Adidas decided to disburse the Corona bonus of about 1,000 euros for each of its 60,000 workers worldwide.
The company announced that the move was motivated by thanksgiving to its employees at Christmas.
Adidas was caught in the cycle of the Corona crisis last spring and recorded losses for a period of time, which prompted the Executive Presidency Council and other leaders to give up part of their salaries. The company’s shareholders agreed to cancel the dividends.
Adidas’ profits fell to near 95% during the first quarter of 2020, by 95%, while the reasons for the collapse in sales were attributed to the (Covid-19) pandemic.
According to data issued by the company in early May, net profit fell to 31 million euros (33.6 million dollars) compared to 623 million euros in the same quarter of 2019.
After its cash reserves declined by more than 500 million euros in the first quarter of 2020, in April, Adidas secured an emergency loan of 2.4 billion euros from the German public investment bank KFW and 600 million euros from private banks.