Team Adidas – Reebok Gets Stronger and More Powerful
German football boot maker, Adidas is finally seeing some positives from its take over of rival Reebok last year. This week, Adidas released figures saying that its sales of sportswear, including Adidas football boots, had risen by 3% in the first quarter of 2007, taking sales to an impressive £1.74billion. The results are seen as a healthy return following its difficult integration with Reebok, whose own sales rose by 15% in the same period.
The main reason Adidas bought Reebok was to give them a stronger foothold in the all important US market, which is dominated by Nike, but where Reebok has a strong position in the sports and fashion markets. The move into the US market mirrors that of Adidas’ long-term rival Puma. The approach seems to be working well, as Adidas are taking business away from Puma, who reported this week that its own net profit rose by only 4 percent in the first quarter, but lowered its outlook for full-year sales and earnings growth because of a drop in U.S. orders of 18% as Puma’s most important individual client cut purchases of its products.
Adidas are reaping the benefits of some heavy promotions this year, whilst Puma appear slightly lost of focus, perhaps pre-occupied with their impending take-over by PPR. The news for Adidas and Reebok put them in great shape for the forthcoming release of their new football boots, as well as the major tournaments ahead in 2008. We’ve already seen how Adidas and Reebok can work together to produce the Reebok Sprintfit, and as more integration continues, the future for Reebok looks as bright as an Adidas Tunit in Orange!
