Why Does Adidas Sell Its Sub Brands In Succession?

Following the decision to sell the US golf brand TaylorMade-AdidasGolf in early May, Adidas group announced that it will strip off another US sports brand Mitchell&Ness.

Outgoing

HerbertHainer, chief executive of the group, said that the sale of Mitchell&Ness would make the group more focused on the core profitable business.

Adidas plans to use soccer, running, women, Sports Classics and children's categories as the main driving force for core business and profitability.

Philadelphia based Mitchell&Ness was founded in 1904, and was bought by Adidas in 2007. It has the clothing production license of the major American Sports League such as the professional basketball league and the National Football League.

It is understood that the above mentioned brands are all Private Equity Investment Firm JuggernautCapitalPartners, and the paction price is tens of millions of euros. The proceeds will be invested in its "new" strategic plan to boost turnover and profits.

Adidas chief executive HerbertHainer said that nostalgia style headgear and clothing are not the core of the strategy. The sale of Mitchell&Ness will simplify the business and attract more targeted customers with the core brand of the company.

The paction on Mitchell&Ness is expected to be completed in the two quarter.

Selling sub brands with poor performance or bleak prospects is a common practice of Adidas.

In 2006, Adidas acquired the Rockport Le step brand, the latter as the business leisure brand, the main comfort card. After encountering a drop in performance, in August 2015, Adidas sold TheRockportCo. to the new holding company jointly formed by Boston Investment Securities Corp BerkshirePartnersLLC and NewBalanceHoldingInc.

In 2005, Adidas bought Reebok (Reebok) at a price of 3 billion 800 million US dollars (about 24 billion 307 million yuan), but in 2013, Adidas tried to sell the Department at a price of 150 million US dollars (about 959 million yuan).

Subsequently,

Adidas was pformed into a fitness brand and changed LOGO, so it turned over successfully.

In 2015, excluding the exchange rate factor, Reebok sales increased by 8% over the same period in 2014, mainly due to Reebok's two digit sales growth in training and studio categories and the growth of high digit sales in running categories.