Reebok’s transformation under what should soon be the brand’s new management includes an expanded presence in Foot Locker’s thousands of stores.
Through a new partnership agreement with the footwear seller’s soon-to-be owner Authentic Brands Group (ABG), Foot Locker and its banners will deepen their assortment of Reebok merchandise by fall 2022, and will exclusively carry select Reebok footwear models for men, women and kids in company-owned stores and U.S. e-commerce sites.
“We are thrilled to announce our Reebok partnership with Foot Locker as they are an essential part of our strategic growth plan for the brand,” ABG CEO Jamie Salter said in a statement, noting the 2,900-store chain’s “important position with both sports and lifestyle audiences.”
ABG “look[s] forward to driving brand heat with new and iconic product,” he added.
Not only is Foot Locker getting exclusive Reebok basketball shoes launches as part of the deal—it’s bringing considerable star power as well. The athleticwear and footwear retailer will carry exclusive Reebok collections and styles from NBA legends Allen Iverson and Shaquille O’Neal. O’Neal, who began his pro basketball career with Reebok as his sponsor, is currently a shareholder in ABG, which licenses products under his brand name.
“We are incredibly excited to partner with ABG and Reebok to gain exclusive access to industry renowned product,” said Richard Johnson, chairman and CEO of Foot Locker, Inc. “This partnership builds on our commitment to elevate the customer experience, offer consumers high heat product from the biggest brands, and build collaborations with the biggest names in sneaker culture.”
The move evokes another recent partnership under the ABG umbrella, in which JCPenney launched Forever 21 merchandise in 100 stores and online. While ABG wholly owns the Forever 21 brand, it also is a partner in the ownership group of JCPenney, which includes mall operators Simon Property Group and Brookfield Asset Management.
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Reebok has long needed a shot in the arm, and the ABG acquisition is the latest hope for the Cardi B-approved footwear brand, which was acquired from Adidas for $2.46 billion. Sparc Group, a joint venture between ABG and mall giant Simon Property Group, will take the lead on Reebok’s operations upon the transfer of ownership, which is supposed to close in the 2022 first quarter.
One of the ways to bring the company back to prominence is through international partnerships, which ABG has quickly lined up in recent months. Reebok now has operating partners to help the company distribute product worldwide, including Greater China, India, Latin America, Australia, New Zealand, Israel, the Middle East and North Africa. European sports apparel retailer JD Sports Fashion plc also signed a strategic deal late last year to carry the brand across its stores and e-commerce sites.
Not all changes have been positive as the Reebok confirmed plans to lay off approximately 150 employees as a result of the acquisition, with the majority of cuts coming from the company’s Boston headquarters. And earlier this month, creative director Kerby Jean-Raymond said he would step down after only 17 months in the role.
As part of the Reebok transformation, Sparc created the Reebok Design Group (RDG), the company’s global brand hub for design, development and innovation, and the supplier of core product categories. Foot Locker will work with RDG as it develops and rolls out new products.
Foot Locker itself has been working to stay in step with a changing consumer. It paid $1.1 billion combined to acquire street-savvy footwear sellers Atmos and WSS and made a slew of new leadership appointments and organizational structure changes in November last year. It’s also investing in private-label brands to complement its largely footwear-focused assortment. The parent to Lady Foot Locker, Kids Foot Locker and Champs Sports reports fourth quarter earnings on Feb. 25.
ABG appears to be in a healthy spot after spurning plans to go public in favor of private equity ownership. While an IPO may have netted ABG a $10 billion valuation, the Juicy Couture and Barneys New York owner was valued at $12.7 after selling the majority stake to CVC Capital Partners (CVC) and HPS Investment Partners (HPS).
Known for scooping up distressed lifestyle brands such as Lucky Brand, Brooks Brothers, Forever 21 and PVH’s Izod and Van Heusen in an effort to revitalize the businesses, ABG doesn’t seem to be done after the Reebok deal.
“As traditional distribution models continue to experience rapid change in the evolving consumer landscape, we expect to have numerous high quality acquisition opportunities over the next several years, which we expect would increase our earnings and the scale of our business,” ABG said in a statement last year when it initially planned to go public.