A hip-hop business mogul and a former basketball star are teaming up with the hopes of scooping up and revitalizing one of footwear’s most famous brands.
Percy “Master P” Miller, most known as a rapper and the founder of No Limit Records, and retired NBA point guard Baron Davis are in negotiations to purchase Reebok from parent company Adidas, Miller’s public relations team confirmed to Sourcing Journal on Wednesday.
After reports of a potential sale first surfaced in October, Adidas confirmed earlier in December that it was considering strategic alternatives for Reebok, which would either include selling off or keeping the brand.
Adidas initially said a decision would be announced on March 10, when the company’s five-year strategy will be officially presented at its annual investors’ conference.
Adidas’ asking price for Reebok, which it acquired in 2006 for $3.8 billion, has been in the range of $2.4 billion, according to a report from German business publication Manager Magazin. The report, which first broke the rumor that Adidas was looking for a Reebok sale, indicated that CEO Kasper Rorsted would accept less in an acquisition.
If a deal occurs, the move would be a major change of direction for Reebok, which has lost its footing since the Adidas acquisition. In 2007, more than $2 billion came from Reebok, representing one-quarter of Adidas’ total retail sales at the time. Despite a bounce back to short-lived profitability in 2019, the brand’s sales have since plummeted to 6.75 percent of Adidas’ total sales as of the third quarter of 2020.
Miller, whose entrepreneurial efforts have spanned entertainment venues such as television and cinema, fashion and most recently food products, already operates in the footwear space through his Moneyatti luxury brand. The footwear and streetwear brand is described as “a full collection of deluxe sneakers with unique and luxurious materials,” with the products being manufactured in Italy.
Adding more fuel to the fire, Davis recently joined the board of Bull Horn Holdings Corp., a special purpose acquisition company (SPAC) that went public in November. The company intends to target companies in the sports, media or entertainment industries, potentially making it a fitting destination for Reebok if the deal was made through the SPAC.
Reebok was ahead of the curve in signing hip-hop stars to shoe deals in the same way athletes were typically signed. Sean “Jay-Z” Carter signed with Reebok back in 2003 and dropped the S. Carter shoe line. In 2004, Reebok’s U.S. footwear sales grew by 17 percent, due in large part to its continued investment in hip-hop. In recent years, Reebok has teamed with two of hip-hop’s biggest artists, Kendrick Lamar and Cardi B, on footwear lines.
With the careers of Miller and Davis spanning music, entertainment and sports, their ownership of the Reebok brand may be able to bring cachet to the company in a way Adidas couldn’t capitalize on. In particular, Miller told Forbes that alongside creating a new identity for Reebok, they want to give smaller shoe companies opportunities for distribution.
“As we focus on turning Reebok into a lifestyle brand not just a basketball brand, our most important initiative will be to put money back into the community that built this company,” Miller said.
Miller shared similar thoughts with ESPN’s Eric Woodward, particularly in serving the Black community, both for Black-owned businesses and consumers alike.
“These companies have been benefiting off us, this could be history for this company going Black-owned,” Miller told Woodward, who initially broke the report on Monday.
Reebok has reportedly attracted the interest of several suitors, most recently brand management firm Authentic Brands Group. ABG, which already has plucked up struggling major fashion brands including Barneys, Forever 21, Lucky Brand Dungarees and Brooks Brothers, has since been tied to potential interest in bankruptcy-ridden British fashion giants Arcadia Group and Debenhams.
ABG’s interest is noteworthy, particularly due to its partnership with one of basketball’s most iconic figures, Shaquille O’Neal. O’Neal, who sold his brand rights to the brand management firm in 2015, has publicly expressed interest in buying Reebok.
The October Manager Magazin report also tied China’s Anta International Group Holdings and VF Corporation to a possible Reebok deal. The next month, The Financial Times reported that private equity firms Triton and Permira, which owns Dr. Martens and is reportedly in the process of spinning off the footwear brand into its own public company, have shown interest. Triton does not own or operate any other apparel or footwear brands.
On Tuesday morning after the initial report from Woodward, Miller alluded to a billion-dollar deal in the works, tweeting that he “Went from doing million dollar deals, to billion dollar deals! #Godisgood Took a page out of Reginald Lewis’ book, buying major companies to put money back in our communities and to give our people opportunities. This is only the beginning!”
In a follow-up tweet, Miller tagged Davis saying that the unnamed deal was “definitely one of many deals we have on the table” in a plug for Moneyatti.