As Authentic Brands Group prepares to bring Reebok into its fold, insiders are buzzing about how the storied athletic brand’s team — and culture — might evolve.
Reebok’s new chapter ushers in a world of possibilities for a brand no longer bound to Adidas, the parent company that had owned the label since 2006. Since ABG revealed the $2.5 billion buy last fall — its biggest and boldest acquisition to date — CEO Jamie Salter hasn’t been shy about his ambitions for Reebok and its importance to the brand management powerhouse.
And the hard-charging CEO is already making notable moves — even before the official close, which is set to take place before the end of Q1.
ABG announced multiple plans for licensing and distributing the brand across the globe, including a partnership with JD Group to distribute Reebok across more than 2,850 stores in North America and Europe, as well as deals to sell Reebok in India, China, the Middle East and North Africa. Last week, ABG inked a deal with Foot Locker Inc. to exclusively carry certain Reebok shoes in its U.S. stores and website. For distribution across Europe, ABG has tapped New Guards Group, which is owned by Farfetch Ltd., to oversee Reebok’s retail stores, e-commerce operations and wholesale business in Europe as the core operating partner for the brand in the region.
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Salter told FN in November that he predicts Reebok will see global retail sales of more than $5 billion in 2022 with a plan to hit $10 billion in annual sales globally in the next five years.
But with so much focus on Reebok’s business strategy, critics and industry watchers note that the same attention should be given to the brand’s voice and identity, arguably the most crucial and delicate part of a legacy label.
“There’s been so much time trying to figure out the business model and signing these licensing contracts,” said one employee at Reebok, who asked to remain anonymous because of a company policy to not speak to press. “I don’t feel like any of us still have a super clear answer of what the brand direction is.”
More questions began to surface in recent weeks after Kerby Jean-Raymond said he would leave his role as global creative director of Reebok in March. (The designer introduced his Pyer Moss label to Reebok in 2017 and became the brand’s global creative director in 2020, a notable appointment during a year of racial reckoning at Adidas.)
Just a few days before the designer’s revelation that he would exit, Reebok laid off 150 employees at its Boston headquarters — including multiple designers — in late January.
FN spoke to six former and current Reebok employees, all but one of whom requested anonymity to speak more frankly. In cases of anonymity, identities were verified. Four of these employees described a lack of certainty with brand direction, though some expressed optimism at the chance for more creative freedom under their new owner.
While it is not surprising for creative direction to shift during a time of such vast change, employees and analysts agree that a clear creative voice is crucial, especially for a footwear brand that lost its mojo in recent years. Though U.S. sales were up 76% in the first six months of 2021, versus 36% for the industry, the brand’s issues stem from its faltering image, especially among younger consumers.
“The design and the brand direction is the thing that should come first, the thing that should be at the heart of the reinvention,” said managing director of GlobalData Neil Saunders. “The distribution strategy is a matter of technicality, and it’s slightly worrying if that is what they focus on.”
A fitness-focused brand
Since its days as a fitness and aerobics focused brand in the 1980s, Reebok has evolved and dipped its toes in many different sectors, from sports to music to fitness.
For example, Reebok has a rich history in team sports. In 1992, the company signed a multiyear year deal with NBA star Shaquille O’Neal (who is now the second-largest individual shareholder of ABG). That deal was worth $15 million and launched a series of sneakers, including the popular Reebok Shaq Attaq. Then in 2001, Reebok signed two 10-year deals with the NBA and the NFL. And in 2004, the brand inherited a deal with the NHL after acquiring The Hockey Company.
To many, the problems with Reebok began after it was purchased by Adidas. The German athletic giant took over Reebok’s NBA deal in 2006, and in 2017, Adidas replaced Reebok as an official sponsor for the NHL. Reebok also lost out on its NFL deals to other growing brands in 2012. Under Adidas, Reebok was relegated to fitness while its parent company took on the big sports leagues.
Instead of directly competing with its parent brand, Reebok took a back seat. As Saunders put it, the brand assumed the role of the neglected “step child” next to Adidas, which got more focus and attention.
But this distinction was confusing for consumers. In a world where sport, fitness, performance and athleisure continue to converge, these limitations hindered Reebok’s growth. The definition of fitness is constantly changing and often blending with adjacent categories like fashion, entertainment and sport. So going all-in on one version of “fitness” did not always make much sense.
“I think that’s why we’ve seen the brand have so many up and down moments,” explained Jazerai Allen-Lord, founder of the True to Size Agency and a footwear veteran who designed a sneaker with Reebok in 2019. “You have to be in agreement on what that story is across departments, across product development, across everything.”
To be sure, Reebok wasn’t gasping for air when it was sold — unlike most struggling brands acquired by ABG, Forever 21 and Barneys New York among them.
But from a brand identity perspective, Reebok was still in limbo.
“We had [the] benefit of the supply chain,” the aforementioned Reebok employee said of working under Adidas. “But we had limitations of brand direction. There was always kind of an unspoken rule that we couldn’t really get involved in team sport and there was a big push that we are supposed to be the fitness brand and Adidas supposed to be the team sports.”
Losing its ‘street cred’
This sports-versus-fitness designation was part of how Reebok lost its “cool,” according to some. Being involved in sport opens the door to working with influential athletes who could then become ambassadors for the brand. When Adidas took over Reebok’s sporting league contracts, this was largely no longer Reebok’s territory.
“In the sneaker market, there is a lot of emphasis placed on brand endorsement, cachet, cool, street cred, all of those kinds of things,” Saunders said. “Adidas missed a trick in not linking Reebok to some of those very essential functions.”
One recently let go employee who was at Reebok for nearly 20 years saw the brand’s departure from sport as the No. 1 reason for its faltering performance.
“We are a sports brand,” this person said. A focus on solely fitness — which is an essential part of sport — was not enough to build brand momentum and buzz, this employee asserted.
To some, the brand’s obsession with fitness and its partnership with CrossFit (which launched in 2011) is at odds with its focus on other unrelated brand endorsement deals — like with musicians like Ariana Grande or Cardi B — leading to what the above employee described as a “split personality” at the brand.
In June 2020, Reebok ended its partnership with CrossFit after the organization’s former CEO, Greg Glassman, made an insensitive comment on Twitter regarding George Floyd. Still, Reebok president Matt O’Toole affirmed that Reebok was still committed to supporting CrossFit athletes and affiliate partners.
Bringing Reebok back
Salter acknowledged Reebok’s limitations under Adidas as well. In explaining his approach to design and product at Reebok, he seemed to suggest that he would take a more laissez faire approach.
“We basically said to the employees: show us what you want to do, tell us what you want to do,” he told FN in a previous interview. “It’s going to be sort of a bonanza.”
In further explaining its approach to design, an ABG spokesperson noted the recent launch of the Reebok Design Group (RDG), which it described as a “newly created global brand hub, will be responsible for all design, development, innovation and creative services to partners around the world and will ensure the brand’s history, vision and ethos continue to be preserved.” However, ABG declined to share details on creative strategy and focus areas for the brand.
Reebok has recently leaned into certain sports-driven activations. At All-Star Weekend this year, the brand launched a new basketball sneaker, the Instapump Fury Zone, and a new colorway of Allen Iverson’s Question Mid for the shoe’s 25th anniversary, relying on ’90s nostalgia and retro models to drum up excitement about the brand.
While retro styles are important for a heritage brand like Reebok, experts agree that ABG needs to foster fresh and compelling product. Reebok can’t just rely on past wins.
“Today’s consumer is not the consumer who fell in love with Reebok,” Allen-Lord said. “You’re going to have to really speak to them through product in a way that you never have before because the product itself is not attractive to the consumer today.”
But even if ABG gives Reebok creative freedom, new talent is needed, given the layoffs that heavily impacted design departments, according to employees. (ABG did not comment on which departments were impacted by the layoffs). RDG will be based in Reebok’s global headquarters in Boston and led by president Matt O’Toole and SVP and GM of product Todd Krinsky.
“The tricky part is with all of the layoffs, the people in charge of that creative direction, including Kerby, they’re all gone,” said one current design employee. “Everything is so up in the air at this point.”
To be sure, ABG’s focus on sales and growth has yielded wins for the company in the past. For example, ABG saw some success with its turnaround plans for Juicy Couture, which relied on new retail partnerships, licensing agreements and a collaboration for a footwear line with Steve Madden.
“I think that they probably know how to make money,” said one recently laid off employee who worked in design. “But in terms of being a design-driven company, I don’t think that’s a priority whatsoever.”
There are many unknowns for what a Reebok under ABG will look like. But alongside the anxieties, there is also hope — for a brand with no limitations, a clear voice and a chance to meet its full potential.
“I feel like we just got adopted by new parent,” said Calvin Green, an associate brand manager at Reebok. “And this new parent is going to let us be ourselves.”
