Inside Reebok’s Comeback Plans After Adidas’ Sale to Authentic Brands Group
It’s been less than a year since Authentic Brands Group (ABG) closed its acquisition of Reebok from Adidas for $2.5 billion, yet the heritage athletic brand already has a different energy.
Just before Thanksgiving, Todd Krinsky, a veteran of Reebok for more than 30 years, joined ABG president and chief marketing officer Nick Woodhouse in New York City for a day of interviews with select media. And Krinsky, who was named Reebok CEO in September, was front and center.
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“One of the reasons we bought Reebok was because of Todd,” Woodhouse told FN. “There’s probably 50 or 100 people in the world that could be the CEO. Todd has this unique skill as a tastemaker. He has a gut instinct to make bold calls. The person at the top needs to be able to look at a shoe wall and say, ‘We’ve got some winners, and here’s why they’re winners.’ That’s a unique talent.”
Woodhouse continued, “If you look at brands that have made missteps, they’ve hired incredibly smart people, but if you don’t know if a shoe will sell, it doesn’t matter.”
In addition to promoting Krinsky, who most recently served as SVP of the Reebok Design Group, ABG also announced in September that outgoing Reebok CEO Matt O’Toole will become ABG’s executive vice chairman in 2023.
In his new elevated position, Krinsky — a self-proclaimed emotional leader — said he plans to turn up the heat on the passion at the brand, which dwindled under the ownership of Adidas.
“This has been missing, not because Matt didn’t want to do it, but because he had to figure out the business fundamentals first. I benefit from the work Matt did because he laid a foundation for growth,” Krinsky said. “In this next era of Reebok, I can build a foundation with more emotion, more passion. And product may be at the forefront of things a bit more.”
Krinsky will need his gut instincts and more in order to achieve ABG’s lofty sales goals. In November 2021, just three months after the purchase, ABG CEO Jamie Salter said Reebok should see global retail sales of more than $5 billion in 2022 and $10 billion in annual retail sales globally in the next five years.
Woodhouse confirmed one goal has already been achieved.
“This year is done and exceeded,” Woodhouse said. “When we bought the brand, it was around $3.6 billion or $3.7 billion at retail. We’ll be at about $5.5 billion next year going into 2024. Our goal is to get to $10 billion and we’re going to get there in the next three or four years.”
Life After Adidas
Courtesy of Reebok.
With Adidas no longer in control of Reebok, Krinsky outlined the brand’s plans to gain ground in the ultracompetitive athletic marketplace, repeatedly using the word resurrection.
The difference in operating under ABG from Adidas, Krinsky said, is “night and day.”
“I can’t sit here and say everything that didn’t work well for Reebok was because of the different ownership. That would be insincere,” Krinsky said. “I like to use this as an analogy: We were driving Reebok 40 or 50 miles an hour. We weren’t sure what we could play in, what we couldn’t. We didn’t have access to a flexible supply chain, so we sometimes couldn’t find if knit was a trend, for example. And by the way, they were making decisions that a lot of us would make if we ran the brand. [Adidas is] a big brand and we’re smaller, so if a new innovation comes across the desk, it’s probably going to Adidas.”
He continued, “Now, we’re driving 100 miles an hour. We’ve got entrepreneur ownership. There’s power in a great brand like Reebok being unleashed. We come to work empowered, we have this great brand with all these tools. Now, we have the ability to go faster.”
This resurrection also includes a search for new talent. In January, weeks prior to the closing of the sale to ABG, Reebok confirmed it would lay off 150 people in Q1 of 2022. Most of the people impacted, Reebok said at the time, worked in its Boston headquarters.
Now, with the help of ABG, Reebok is looking to hire in all facets of the business, with an emphasis on design and digital to drive the e-commerce business.
“The industry is going through a huge shift right now. People are looking for new opportunities more than ever, and with new management and a new direction and this great brand being out from under a competitor, it’s an attractive place,” Krinsky said.
Let Reebok Be Reebok
Courtesy of Reebok
Perhaps Reebok’s greatest advantage over its athletic industry counterparts is its ability to compete across multiple critically important categories.
“What’s happening with Brooks, with Saucony, with Hoka and On, generally, there’s a limited playing field where they can go. Same with everybody else,” Woodhouse said. “Reebok has heritage of being in many categories, and we have permission to be there. No one’s going to be surprised if Todd decides to get in the soccer business in three years because we have heritage. No one is going to be surprised if he makes a track spike, a high jump shoe.”
Krinsky doubled down on Woodhouse’s sentiment and touted the brand’s robust archive as one of Reebok’s greatest strengths.
“We arguably have the second-best archive in the industry. We’ve played in every category, and we’ve got an amazing archive to tap into. And we have a rich heritage in innovation,” Krinsky said. “Reebok has been at its peak when we’ve made bold moves, when we’ve been irreverent or counterculture in sport — signing Allen Iverson and Jay-Z, launching Pump technology.”
He continued, “How can Reebok win? A new playbook with the things that made us relevant to the consumer before — this idea of irreverence, disruption, counterculture, led by our great archive and new innovation. We have a huge runway right now.”
Breaking down Reebok’s plan to win consumers over, Krinksy said there are three key areas of focus, led by training and fitness.
“This has been the heritage of the brand since the late ’80s. It’s been a consistent part of who we are. Reebok is the first brand to inspire women to sweat and to move. We’re always going to have a leadership position in training with our footwear and apparel,” Krinsky said.
Also, Krinsky said Reebok has plans to lean even heavier into its archive.
“We’ve got so much product that we haven’t launched. There were a lot of things we couldn’t do in the past for different reasons, so we’re going to unleash our archive,” Krinsky said.
To amplify the newly added silhouettes in its Classics category, Reebok is looking to land a high-end luxury partnership. Woodhouse said the brand wants to align with a “Dior-type.”
This will be aided by ABG’s partnership with the Farfetch Limited-owned luxury platform New Guards Group, which was announced in February.
“We’re fortunate to have this partnership with the New Guards Group and Farfetch. There’s a bit of a red carpet with a lot of these luxury brands,” Woodhouse said. “There are five or six on the radar that are all very interested in doing something with us.”
He continued, “We will have our Dior moment in the next 18 months.”
As Reebok searches for its next partner, Krinsky said he is looking forward to working more with Maison Margiela, a frequent collaborator.
“They’re a fashion house that has a strong aesthetic and they brought that into our Classics in a unique way. It’s some of the freshest product I’ve seen a partner to do with us in quite some time, and now they’re doing basketball,” he said.
But don’t expect Reebok to flood the marketplace with collaborative product. Krinsky said Reebok will continue to do collaborations, but there will be fewer — and those that release will be meaningful.
“We’re focusing on the storytelling of the two brands and the why,” Krinsky said. “Collaborations have become so saturated. The ones that are winning are those where there’s a story of heritage or some territory that both brands are in that makes it rich.”
Aside from the high-fashion partnerships, Krinsky said Reebok will continue to work with strong streetwear brands such as Palace, Bape and JJJJound, as well as strong commercial pop culture properties.
Perhaps Reebok’s most important area of focus — and its most daunting task — is to win with innovation. This will largely play out in the athletic industry’s most competitive category: running.
“We need to break through in running,” Krinsky said. “No matter what happens around the world with functional fitness, running will still have the highest participation rate. It’s the biggest category in the industry with the biggest participation. In the past, we’ve launched things, but one of our biggest issues has been not sticking with them.”
He continued, “Consumers bought [the shoes], but in this industry, not everything blows out on day one, especially a new innovation. The brand has been a little impatient You have to learn with what consumers bought — what they liked about it. How can you refine it? How can you make it better time over time?”
Looking ahead, Krinsky said Reebok will reenter run in a meaningful way with new technology in 2024.
This innovation push will also lead Reebok back into other sport categories in 2024 and 2025, including performance basketball. Krinsky confirmed that the brand will have shoes on the court in 2024.
“We’ve got great technologies, we’ve got great heritage assets and we’ve got partnerships. We’re taking time to think of the best way to reenter basketball,” the CEO said. “In the past, we were incredibly disruptive and irreverent with the people we signed and the way we would go to market. This is how we’re looking to do it again.”
He continued, “It’s not about player basketball shoes anymore. That formula is not what kids are looking for. They’re not overly inspired by the basketball category from a performance perspective right now. We’re looking at all the ingredients we have, where we’ve been successful in the past, and how to reenter it in a more brash, unique way.”
Ramping Up Retail
Courtesy of Reebok
Both Krinsky and Woodhouse are confident in Reebok’s archive and ability to innovate, but getting eyes on the product has proven challenging in the past.
“There are great things that Todd and his team have done that people don’t know about because you need a shoe shelf,” Woodhouse said. “The Nike bag is big and robust, and when they open the bag, Foot Locker says, ‘Let’s put more Nike shelves up.’ Being under the auspices of Adidas, which is an amazing brand and company, Reebok is not going to be the first thing they pull out of the bag. They’re pulling Yeezy and Superstar and Stan Smith.”
He continued, “Reebok’s got shoes that compete with all those shoes. There’s a whole generation of kids who are like, ‘The Club C is sick,’ but they haven’t seen it on shelves. They haven’t seen BB 4000. But they’ve seen the [Nike] Air Force 1, they’ve seen the ‘Panda’ Dunk.”
Woodhouse believes relationships with influential retailers will be integral to Reebok’s success.
“We love good retailers who know how to tell stories. There are terrific retailers like Foot Locker or JD Sports or Kith, but America also buys their shoes at DSW, a terrific shoe retailer,” Woodhouse said. “You walk in and see New Balance, Saucony, Adidas, Nike and other fashion brands. We’re not afraid of that business. We can play in the world of cool shoe drops and we can also play in middle America and middle around the world.”
Since the acquisition, ABG announced several revamped retail partnerships for Reebok. In December 2021, for instance, ABG announced it has entered into a partnership with JD Sports to stock Reebok footwear and apparel in more than 2,850 stores across North America and Europe. The nonexclusive agreement, ABG revealed at the time, would have Reebok stocked in JD Sports’ many banners, including Finish Line, DTLR, Shoe Palace, Size, Sprinter and SportZone, as well as their e-commerce platforms.
In May, ABG announced Macy’s would soon expand beyond just Reebok footwear to feature sportswear and activewear for men’s, women’s and kids. Also, Reebok will develop exclusive collections for Macy’s through the Reebok Design Group. The product will be sold in stores, on the retailer’s app and its website.
ABG and Reebok also strengthened ties with Foot Locker. In February, ABG announced it had signed a deal with the retail giant to exclusively carry certain Reebok styles — including coveted basketball signature looks from NBA icons Allen Iverson and Shaquille O’Neal — in both its U.S.-based stores and website.
Krinsky said Foot Locker will soon deliver several compelling offerings from Reebok, including retro basketball stories that Reebok hasn’t told before. Also, the exec is excited for Foot Locker to reveal Reebok’s mashup of two iconic brand stories, pairing the story of retired tennis great Michael Chang with O’Neal.
The CEO described the conversations with Foot Locker as “a lot different now,” and said the retailer is now a premium basketball and Classics destination for Reebok. Also, by tripling or quadrupling the shelf space, Krinsky said consumers are going to see “a totally different Reebok.”
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