Blog: Team effort
Leonie Barrie | 3 August 2005
Did anyone see it coming? I must admit I did a double-take over today’s news that Adidas-Salomon is to buy Reebok. The two sporting goods companies have come together in a deal that gives Adidas-Salomon a newly expanded global reach and an all-important push into North America – where it will now be able to take on Nike directly. Adidas, which has contracts with football star David Beckham and rap artist Missy Elliott, will also be able to extend its reach to Reebok’s licenses to clothe players in the National Football League and National Basketball Association in the US.
In combination, the companies will also have more muscle in negotiating better terms or conditions with suppliers and retailers. Another positive is that the deal complements Adidas’s strengths in Europe and Asia where sports such as football are popular.
Perhaps surprisingly, analysts don’t seem convinced that Adidas’ move makes sense. One says that the message coming from Adidas is ‘We can’t cut it alone in the US,’ while others believe that the two firms will have to work hard to change many people’s preconceptions. Rather than complement each other, they suggest the focus pursued by each of the two companies may well prove difficult to merge. Whereas Adidas has a strong performance sportswear brand, Reebok seems to have concentrated more on positioning itself as a high fashion brand through endorsements with celebrity entertainers and athletes. Market leader Nike, on the other hand, is very focused and has built its brand reputation on sporting excellence and product innovation.
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