Adidas CEO: We’re Not Selling Reebok

Adidas CEO: We’re Not Selling Reebok

At the company’s annual meeting, Kasper Rorsted, CEO of Adidas AG, rejected calls from some shareholders to sell Reebok.

“We are not going to sell Reebok because we are still very confident of the strategic position of the brand,” Rorsted said at the meeting, according to Reuters. “We are convinced the measures we are taking are going to be successful.”

The meeting came a day after Adidas said it reached an agreement to sell Adidas Gofl, including Taylormade, to KPS Capital Partners. Rorsted also said on Thursday it was discussions with several interested parties for on the sale of the CCM brand.

Rorsted replaced Herbert Hainer as CEO in October and announced an extensive restructuring in Reebok in November. The moves include accelerating the closing of its outlet stores in the U.S. and opening a new headquarters for Reebok in the city of Boston to further separate the brand’s positioning from the Adidas brand.

In the first quarter, Reebok sales in the quarter climbed 13.3 percent on a currency-neutral basis to €492.4 million ($540.5 million), although the gains were partly due to changes in its launch schedule. Revenues at Reebok declined 2 percent in North America, mainly reflecting the planned closure of Reebok factory outlets in the U.S.

Despite the strong growth, particularly seen in training and classics, Rorsted said on a conference call that the company remains “quite happy” seeing Reebok growth a 6 percent to 8 percent rate in the near term as its turnaround efforts are just starting. They include the closing of 50 stores in the U.S., of which 30 have already shuttered. Reebok is also bringing in a new design structure that should improve its overall cost of goods, defined new consumer touch-points in the creation process, and initiated some design changes that require a 12- to 18-month lag to become fully effective.

Said Rorsted on the call, “What we need to do is we need to make sure that the quality of the top line is found on the bottom line rather than having a larger top line. So overall not a bad situation, but this is far too early to do any celebration when it comes to Reebok. We still have a long way ahead of us.”