Reebok gets second shot at India growth with Aditya Birla, finally escaping from Adidas shadow
Aditya Birla group’s acquisition of Reebok in India will finally give it a second chance to grow in a burgeoning market, emerging from under the shadows of its larger competitor and former owner Adidas, for the first time in 15 years. Earlier this week, Aditya Birla Fashion and Retail Ltd (ABFRL) said that it has acquired exclusive rights for distribution and selling of Reebok merchandise through wholesale, e-commerce and exclusive brand outlets across India and other ASEAN countries. “For a struggling Reebok, this is an ideal escape route,” brand and business strategy specialist Harish Bijoor said.
Reebok struggled to grow under Adidas’ control
German sportswear brand Adidas had acquired Reebok’s operations in 2006, in order to strengthen its position and corporate strategy. However, 15 years on, the deal did not turn out to be beneficial for either Adidas or Reebok. Adidas had to shut down several Reebok brand stores in a consolidation move. While Adidas made efforts to relaunch Reebok’s brand attractiveness, Reebok’s performance failed to match that of Adidas. Reebok India recently reported its net profit for the financial year 2020-21 fell 93% on-year to Rs 4.9 crore for the year ended 31 March 2021, on account of lower sales.
“At the time of acquisition by Adidas for US $3.8 billion, it was a great move from a market capture point of view but Reebok could not hold its stead due to brand dilution alongside adidas,” said Manas Gulati, Co-founder & CEO, of marketing & communication consulting company, ARM Worldwide. “Reebok always had a risk of cannibalization by Adidas,” said Rohit Kumar M S, Co-founder & Partner, Zensciences.
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