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Adidas plans to sell Reebok business: Rpt

Yahoo Finance’s Brian Cheung breaks down why Adidas plans on selling Reebok.

Video Transcript

[MUSIC PLAYING]

JULIE HYMAN: Time for "Word of the Street," where we check in with our panelists, find out what story he is watching. And today our resident sneaker head is watching a potential sneaker deal. Adidas reportedly interested in selling Reebok. Brian, I'm squinting at your shot. I don't know if you've got either any Adidas Reeboks behind you there. I think it's on Nike Airs.

BRIAN CHEUNG: I don't. And the reason why I don't have any Reeboks, might be the reason why Adidas might want to sell that brand. Apparently, not returning as they had hoped for when they originally purchased that brand back in 2005 for $3.8 billion. But as you note, the reports out there from Reuters and Bloomberg that Adidas is planning on selling, or Adidas is playing on selling Reebok, they want to get the sale done reportedly by March of next year.

Now some rumored suitors for this possible purchase would be VF Corp, the likes of Vans and North Face, or Anta Sports, which would be a Chinese company. But we have to remember that Adidas has not been returning, as I mentioned. They had unit sales that fell 44% in the second quarter of 2020. Obviously, a lot of that due to the COVID-19 crisis. But it does seem like Adidas having some difficulty trying to make Reebok a profitable brand. But for what it's worth, I just saw Reebok released a "Ghostbusters" collaboration. So at least for people that still love the brand, you can try to buy that sometime soon.

JULIE HYMAN: I'm going to be first in line for that one. Brian Cheung, thanks so much, and thanks for spending the past hour with us.