a valued part of Adidas, and we are grateful for the contributions the brand and the team behind it have made to our company. With this change in ownership, we believe the Reebok brand will be well-positioned for long-term success,” Rorsted said in a statement.  The focus for Adidas will now be on its “Own the Game” strategy, which it expects will fuel growth, gain market share and “create sustainable value” for its stakeholders. Behind the breakup  Rosanna Iacono, managing partner of strategy consultancy The Growth Activists who previously held global leadership roles at Nike, believes Adidas may have underestimated the time and resources needed to support two major sports brands.  “While intended as a bolt-on acquisition to drive growth at Adidas, the reality of investing in and driving the growth of two icon brands like Adidas and Reebok is complex and requires significant resources,” Iacono told Inside Retail.  “As Nike began to overtake Adidas in size in the ‘90s, Adidas moved into acquisition mode – but ultimately, it was their failure to have a singular focus on the Adidas business that has led to Nike dwarfing them in size.”  Iacono said that Adidas failed to drive “true ownable innovation” within the Reebok brand, leaving it to lean heavily on its own heritage for brand equity.   “With my experience in private equity and M&As, these types of acquisitions of brands with similar positioning and in similar channels tend to work well in FMCG, but not so well in categories like apparel and footwear,” she said. “Businesses really struggle with cannibalisation fears and the capacity to spread their attention to keep both brands vital.” Iacono points to Nike’s acquisition of Converse as one that worked.    “[Converse] was a lower cost product and initially intended for the value channel. However, they have since built it into a highly successful premium brand, and have really focused on both category and distribution differentiation in order to avoid cannibalisation. But it’s the exception and not the rule.”  The pandemic effect While Reebok, along with many other sportswear brands, suffered in the early months of the pandemic as a result of lockdowns, it is now on steadier terrain, with first half sales of €823 million reported in recent weeks, compared to €600 million last year. And the brand made a net gain of €68 million, compared to a net loss of €69 million in the first half of 2020. For the most part, the sportswear category has made a strong recovery and benefited from long-term lifestyle shifts that have seen consumers embrace health and fitness.  According to Research Dive, the global sports apparel market is expected to expand at a compound annual growth rate (CAGR) of 4.8 per cent, with women’s sports apparel predicted to have the fastest growth. In Asia-Pacific alone, this market is anticipated to grow at a CAGR of 6.3 per cent, generating $96,724.4 million in revenue.  Iacono said that brands needed to “play their cards right” to come through the pandemic strongly.   “The rapid casualisation of fashion, which was already in motion pre-pandemic, and uptake in exercise during lockdowns were major contributors to the growth realised by businesses like Nike, Lululemon and Australian multi-brand retailers like Rebel Sport,” she said.  Nostalgia is not enough While Reebok has been well-positioned to lean into ‘90s nostalgia trends, Iacono believes it will need more than that to stay relevant with today’s consumers.  “The ‘90s dad-shoe phenomenon was a big thing a few years ago and propelled by luxury brands like Balenciaga and Louis Vuitton paying homage to chunky ‘90s Reebok classics with their own footwear with exaggerated proportions,” she said.  “Reebok certainly has a huge opportunity to continue to ride the ‘90s throwback theme, if executed well, but at some stage, it needs to find a way to be grounded in authenticity in order to create more enduring foundations for growth. And that probably means having a renewed element of performance innovation becoming integral to the brand.”  She points to sportswear as a dominant theme in fashion as a major trend.   “From Riccardo Tisci’s Burberry to high-street brands, sportswear is now deeply embedded in fashion in general. The lines have well and truly been blurred between high fashion, streetwear and sportswear.  Reebok’s recent collaborations with famous faces like Ariana Grande and Cardi B  and a focus on the fast-growing women’s apparel segment is helping the brand drive growth and connect with younger shoppers.  Iacono expects such collaborations will continue to be important for the brand and the wider industry.  “Adidas and Nike are obviously doing this really well, but also smaller sportswear businesses that are more comparable to Reebok, like Puma, have done this well with the Fenty x Puma collaboration with Rihanna,” she said.  However, Iacono maintains that the key is getting the core foundations right.  “These generally work well if the brand already has some foundational strength across its product range – a celebrity collaboration alone will not save a brand over the long term.” In order for Reebok to succeed in the long run, Iacono believes it needs to deliver on “differentiated, relevant and sustainable positioning”. “These are the three elements that make for iconic brands and continued growth. At the moment, there is asymmetry in their positioning, and they need to be firing on all three engines to get to the next level of growth,” she said. Sports vs fashion While just over a decade old, ABG has over 30 labels under its belt including Hervé Leger, Aéropostale, Juicy Couture and Forever21. Commenting on the acquisition, Jamie Salter, founder and CEO of ABG, said the company has had its sights set on Reebok for many years and intends to stay true to the brand.   “It’s an honour to be entrusted with carrying Reebok’s legacy forward,” Salter said. “We are committed to preserving Reebok’s integrity, innovation, and values – including its presence in bricks and mortar.” With ABG’s strength lying in marketing fashion to Gen Z and young millennial customers, Iacono said it could focus heavily on the fashion side of Reebok and position it that way. “This would see the brand leaning heavily on its heritage and riffing on that in a continuously trend-driven way. This would take it further away from performance and put it in a comparable category to brands like Champion, which sits in both sports and fashion distribution, but mostly with non-performance product,” she said.   Alternatively, ABG may wish to help Reebok reclaim a position as “an authentic innovator of performance products”, Iacono explained.  “This means directly competing with the likes of Nike, Adidas and Under Armour, which would require a heavy investment in talent, particularly in footwear, that can drive that level of innovation,” she said.  “This pathway is not ABG’s core strength, so they would need to push well out of their comfort zone to pursue this.”