Blog: A rocky road for Reebok
Leonie Barrie | 6 March 2008
Despite a stellar performance from Adidas over the past year, Reebok continues to be a something of a millstone around the Group’s neck. The fourth quarter results are particularly telling: while sales of the Adidas brand rose 20% to EUR1.65bn, Reebok’s slipped 12% to EUR567m.
Other pointers confirm there are still many problems that still need to be sorted out. The order backlog – a key indicator of future sales growth – rose to 17% for the Adidas brand in the fourth quarter, its highest level in nearly a decade, with orders linked to demand from this year’s 2008 European soccer championship.
But order backlogs for Reebok fell by 8% on lower demand from mall-based retailers in the US and Canada – and are likely to keep falling for the next six to nine months the company said.
Adidas says the consolidation of Reebok has helped achieve cost savings of EUR20m. But the departure of Reebok president and CEO Paul Harrington today suggests it expects more from the brand than is presently being delivered – and that all eyes will be watching Uli Becker, currently Reebok's chief marketing officer, when he takes over as the division's new chief executive.
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