Recently, Aditya Birla Fashion and Retail Limited (ABFRL), announced the signing of a long-term licensing agreement with the New York based Authentic Brands Group (ABG), a global brand development, marketing and entertainment company, which grants ABFRL exclusive rights to distribute and sell Reebok products through wholesale, e-commerce and Reebok branded retail stores in India and other ASEAN countries. For ABFRL, the aim is to build India’s leading sports athletic lifestyle brand. This deal marks a foray for ABFRL into India’s fast-growing sports and active-wear segment.
The transaction marks a significant milestone in the journey of ABFRL. Over the last several years, the company has evolved its portfolio into a powerhouse of brands across all major fashion and lifestyle segments. The addition of Reebok will fill an important white space in ABFRL’s portfolio, and increases the company’s ability to engage with consumers across various need spaces. “As Indians get more active, athletic and health focussed, their consumption of apparel and accessories is expected to increasingly change in line with these trends, providing an opportunity to build iconic brands of global repute. Reebok is one of the leading brands in the sporting goods industry globally and has built a very strong presence in the Indian market over the last two decades. In partnership with ABG, we plan to accelerate Reebok’s business in India, combining its global appeal and salience amongst Indian youth,” says Ashish Dikshit, MD, ABFRL.
For ABG, this partnership helps further its global Reebok strategy of assembling a network of core operating partners around the world who are committed to driving innovation and growth, while upholding the brand’s integrity and values. ABG is not new to ABFRL. ABG’s portfolio includes brands such as Shaquille O’Neal, Sports Illustrated, Reebok, Eddie Bauer, Nautica, Izod, Forever 21, Aéropostale, Juicy Couture, to name a few. The company already has an existing partnership with ABFRL for brands like Forever 21, Nautica and Aeropostale. For Reebok, ABFRL will partner with Reebok Design Group (RDG), the newly-established global brand hub based in Boston, on all product design, development, innovation and creative direction to drive a unified brand voice and vision. “ABFRL is a champion of the fashion industry in India with proven expertise in building and operating large-scale lifestyle brands across the region. We are very pleased to expand our existing partnership with ABFRL, which includes Forever 21 and other ABG brands, and are confident that ABFRL will be successful in solidifying Reebok’s position with a growing audience of fans in India and Southeast Asia” says Corey Salter, COO, Authentic Brands Group.
Reebok was originally started in Great Britain in 1958 as a companion company to sporting goods company. After a long successful run, Adidas acquired Reebok after an international property lawsuit in 2005. Though Adidas acquired Reebok, both maintained operations under their separate brand names. However, after some financial struggles, Adidas announced last year its plans to divest from the brand. In August 2021, ABG signed a deal to acquire Reebok for $2.5 billion. The deal is expected to close in the first quarter of 2022.
Over the last few years, with rising income levels, increased health consciousness, and the adoption of active lifestyles by young Indians, the active wear segment has been growing rapidly. This segment is expected to grow to $13 billion by financial year 2024 at an annual growth rate of ~14 per cent. ABFRL already entered this space with Van Heusen a few years ago.
Of course, the proposed transaction with Reebok is subject to the successful completion of due diligence, necessary statutory approvals and signing of definitive agreements. The transfer of ownership of the Reebok brand from adidas to ABG is expected to close in the first quarter of 2022.
Lead pic credit: Reebok India Instagram page