Offers to buy Reebok started rolling in this week with the licensing company behind Nine West and Frye offering around $1 billion for the money-losing sneaker label, The Post has learned.
Jamie Salter’s Authentic Brands Group teamed up with Wolverine World Wide, the footwear maker behind Merrell shoes and Hush Puppies, to offer slightly more than $1 billion for the Cardi B-linked brand, a source said.
That’s well far below the $3.8 billion Adidas paid for Reebok back in 2006.
Apollo Global Management also made a non-binding offer for the struggling fitness label earlier this week, a source close to the situation said.
It’s unclear how much the Marc Rowan-led private equity giant offered to pay for Reebok, but all offers are currently contingent on due diligence. Final offers are expected by late June.
Germany-based Adidas didn’t return a request for comment.
The company has been looking to offload Reebok since Feb. 16, saying it wants to focus on growing its core brand around the world. But the auction comes as Reebok bleeds money — to the tune of more than $100 million in a year before before interest, taxes, and amortization, sources said.
Reebok was founded in England in 1895 and the brand really took off in the 1980s when it introduced the first athletic shoe specifically designed for women. Reebok has since lost its footing as it seeks to compete with a growing number of fitness brands for women, including Saucony and Puma.
The company’s steep losses mean potential buyers cannot borrow money to use toward the purchase, sources said. Also potentially dragging down the price: Adidas will stop making the shoes post sale, requiring some bidders to find footwear partners, sources said.
“It’s a real tough deal,” one source said. “It’s hard to come up with a value for a company that loses money.”
Adidas has told Wall Street that a turnaround it started in 2016, including its 2018 collaboration with Cardi B, has improved the brand’s prospects. It has projected profits within five years under a new owner.
But a source close to the sales process say Reebok’s revenue fell last year to $1.5 billion from $1.8 billion in 2019.
Also circling Reebok has been private equity giant Cerberus Capital Management, sources said. Other interested buyers, Reuters reported last week, include Chinese companies Anta Sports and Li-Ning and Korea’s Fila.