BrandDunk

Branding the World of Sports

Nike vs Adidas: What happens when Reebok goes away?

Posted by ZA on March 9, 2009

For most of the last 20 years there have been three major brands of tennis shoes: Adidas, Nike & Reebok.  Then in a bold move in 2005 Adidas acquired Reebok for $3.8 billion dollars.  The idea behind the purchase is that Reebok would help to increase Adidas’ share of the tennis shoe market in the United States.

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Darren Rovell provides evidence that the acquisition of Reebok by Adidas has not been a success.  In fact Rovell says that Reebok is “going to be on life support” if they don’t hit a home run with their new women’s fitness line.  He goes on to say that Nike’s market share has increased in the U.S. since 2005, while the combined Adidas & Reebok entity is basically treading water.

To me this is just another indication that it is only a matter of time until Adidas kills the Reebok brand forever, and starts selling their products under the Adidas logo.  Adidas has given their Reebok deal over 3 years to take off, and it’s gone the other way.  In the current economic climate its just not smart business for Adidas to try to carry two large operations, when they could combine the two products into one line.  The cost savings would be significant and inheriting the current Reebok deals (e.g.- NFL sponsorship) would further the Adidas brand in the United States.

I recognize that closing up shop at Reebok would lead to a lot of layoffs.  That is obviously not something that I want to see happen to any company.  But the sad reality is that Reebok is not getting the job done for Adidas, and they are already slashing personnel.  So it is better that Adidas make this change now, rather than wait until the Reebok brand is completely irrelevant.  Would I like to see a strong Reebok brand?  Yes, because a third strong brand would only make Adidas and Nike better.  I just don’t think Reebok has enough bullets left to be that brand.

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5 Responses to “Nike vs Adidas: What happens when Reebok goes away?”

  1. […] think its only a matter of time until Adidas takes the cost saving move of closing down Reebok; shutting their separate marketing, operations and brand.  Adidas would then relaunch […]

  2. Pervez S said

    Hey Darren, Nice try! But you need more information and better analytical skills..Sorry, that was disappointing.

  3. Swanny said

    Reebok was a victim of brand loyalty to Nike. A generation of young people believing all the advertising nonsense about just doing it. Forget an actual comparison of comfort and performance, billions in advertising and star athletes pitching their product and you have a formula for success. Reebok actually made some really nice footwear. It’s too bad because the more competition the better!!!!

    • ZA said

      Swanny-
      I agree, but I also give Nike tremendous credit for building that brand loyalty. Also I think Nike shoes have come a long way in-terms of comfort and performance. I buy Nike Air Max shoes now because they are one of the most comfortable tennis shoes on the market. For serious runners, I know there are better brands (Saucony, etc), but Nike continues to evolve in that space.

      Reebok and Adidas had their chances to compete with the Nike brand empire, but continued to misfire through lack of direction. Example: Adidas got so focused on the US market (a smart move) that they left the backdoor open for Nike to get a strong position in soccer. Reebok also has struggled with their brand direction, but hopefully now is going to be put some emphasis on women’s sports (performance) category. They’ve got a big opportunity there.

      ZA

      • Swanny said

        Oh, I give the advertising suits credit for what they do. Unfortunately, what they do is often harmful for the consumers. Of course consumers have themselves to blame. The herd mentality. The inability to really think things through, and decide for yourself. I actually wear Air Max by Nike. I’ve worn Nike for years. Sometimes Reebok or Adidas. People should try and avoid being brainwashed by corporate America, and realize that just because someone famous says something is wonderful, that doesn’t mean it is!

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