Authentic Brands Group (ABG) has lined up its SPARC Group joint venture as a key operating partner after the inks dries on its $2.46 billion deal to purchase Reebok, which is still slated to close in the first quarter of 2022.
The addition of Reebok will increase SPARC’s store count to 1,600 doors, grow its e-commerce platform to over $1 billion and bring total retail sales to $5.5 billion, ABG said.
While ABG CEO Jamie Salter has long looked to acquire Reebok, that possibility came to fruition with an assist from NBA legend Shaquille O’Neal. The 7’1″ mogul became ABG’s second largest shareholder in 2015 after selling the rights to his namesake brand, and has been vocal about the brand manager going after the sneaker-centric company. O’Neal, who also had a keen interest in owning the Boston-based brand, is all too familiar with Reebok’s inner workings. His history with Reebok started in 1992, when he signed a multi-year endorsement deal valued at $15 million. But the one-time Orlando Magic, Los Angeles Lakers and Miami Heat star eventually walked away from a far more lucrative $40 million deal years later after a fan confronted him over the cost and quality of his Reebok-branded shoes.
Reebok came up for grabs a year ago when Adidas confirmed it was looking to unload the Cardi B-approved brand. In February, the German company began the formal divestiture process.
ABG for its part has scrapped plans to go public, instead opting for a private-equity deal that values the firm at $12.7 billion after selling a stake to CVC Capital Partners and HPS Investment Partners. Going this route gives ABG the ability to hunt for more acquisition targets in all-cash deals, and no doubt with input from O’Neal as well.
Meanwhile, Reebok will continue to operate out of its Boston headquarters, with president Matt O’Toole and senior vice president and general manager for product Todd Krinsky remaining at the helm. The Boston office will serve as the global hub for SPARC’s newly created Reebok Design Group (RDG).
The brand management firm said SPARC, which ABG owns in joint partnership with Simon Property Group, will become the core licensee and operating partner for the Reebok brand in the U.S. Under the long-term licensing agreement, SPARC will be responsible for sourcing, manufacturing, branded retail stores, e-commerce operations and wholesale distribution for the brand. Categories include footwear for men, women and kids, as well as lifestyle and active apparel for men and women.
“Reebok is the most monumental acquisition in ABG’s history,” Salter said. “Because of the reach of Reebok’s business around the globe, an essential part of the strategy was to maintain the brand hub that supports and guides a global partner network to preserve and nurture the brand’s heartbeat and unmistakable DNA. Starting with SPARC for the U.S., we are assembling a network of strategic operating partners around the world who are committed to supporting the brand’s innovation, integrity and values. We are excited about the expertise that RDG will continue to infuse into the future of Reebok.”
SPARC CEO Marc Miller said the Reebok agreement adds footwear and a “transformative new vertical” to his group of platforms that include pillars in lifestyle and fashion with names like Nautica, Aéropostale, Lucky Brand and Forever 21, American luxury brands including Brooks Brothers, and Reebok and complemented by Eddie Bauer anchoring sports and outdoor.
“We are thrilled to continue Reebok’s journey under the ownership of ABG. And we’re equally excited for the drive and support that SPARC will deliver to the Reebok brand. Both partners bring significant expertise in global brand building, marketing and retail,” O’Toole said. “Together, we intend to position Reebok for growth and to compete and win in a digitally driven, omnichannel world.”
ABG lined up operating partners for Reebok in Latin America, Australia and New Zealand, and Israel.
The Falic Group will be the leading partner in Latin America, excluding Mexico, Brazil and Argentina. Falic’s platform will oversee Reebok’s retail stores, e-commerce operations and wholesale distribution in the region.
Accent Group will become the core licensing and operating partner in Australia and New Zealand, and will grow the brand through existing wholesale accounts, direct online sales and multi-brand retail banners.
MGS, Reebok’s existing partner in Israel for two decades, has signed a new partnership with ABG, cementing its commitment to grow the brand across all channels in the region.
All three licensees, plus SPARC, will work with RDG to evolve product design and creative direction for each region, while maintaining a unified brand voice and vision.