Reebok Research Invitation B

1
Reebok Research Invitation B
Marketing 710

• Hee Gyu Oh

2
Reebok Recent Situation

• Worlds 3rd largest maker of sporting goods
• 1st Nike, 2nd Adidas
• Brands Reebok, Rockport, Ralph Lauren, RLX
  shoes, CCM, Koho, Jofa, Reebok hockey equipment
  and apparel, Reebok Classic, G-UNIT, S. Carter
  street lifestyle shoes and apparel
• Products Athletic footwear, Apparel, and
  Accessories

3
Reebok Recent Situation (contd)

• Exclusive rights to manufacture and market both
  uniform and sideline apparel of
• The National Football League (NFL), since 2002
• The National Basketball Association (NBA), since
  2004
• The Canadian Football League (CFL), since 2004
• The National Hockey League (NHL), since 2004

4
Reebok Recent Situation (contd)

• Official shoe supplier to the NFL, NBA, and MLB
  (Major League Baseball)
• Major sponsor of stars
• Allen Iverson (NBA)
• Andy Roddic, Venus Williams (Tennis)
• 50 cent and Jay Z (rappers)
• 2005 UEFA Champions Leagues - Winner Liverpool
  won the trophy wearing Reebok kit.

5
Revenue and Net Income
million
million
? Nike (May, 2005) Revenue 13,739 million
Net income 1,211 million
6
2005. 8 , Adidas-Reebok combination announced

• Adidas and Reebok just do it targeting Nike
• Adidas will acquire Reebok in a friendly
  takeover.
• Reeboks stock price jumped 30 in one day after
  Adidas announced the plans to buy Reebok

7
Adidas-Reebok Merge
? Brands will stay separate but complement each
other.
8
Adidas-Reebok deal (benefits/cautions)

• Benefits
• More accessible to athletic events
• Cover all the major sports categories
• Expand Market Share
• ? Adidas-Reebok 28 Nike 31
• Expected savings 120 million within the first
  3 years
• ? Sales, marketing and distribution saving,
  layoff and operations.
• Cautions
• Must be prepared to handle the larger team of
  brands
• Control the difference (Roots, strengths,
  culture), being careful not to lose their
  loyalty.

9
Reeboks CEO- Paul Fireman

• One of Forbes 400 richest people in America.
• Dropped out of Boston University.
• Family man, married to his wife Phyllis for 33
  years and raising three children in his hometown,
  Boston.
• He made Reebok the top class sports goods
  industry with Nike.
• His lifes passion golf
• 1980s, he experienced blackballing (Jewish)
• 1992, opened Willowbend Golf Club (open
  membership)
• Opened 9 more golf clubs worth 2 billion

10
Liberty National Golf Club

• The worlds most expensive golf course.
• Full sight of the Manhattan skyline and the
  Statue of Liberty
• Spent 7 years and 130 million.
• 160 acres, wasteland
• Accessible by car, helicopter, and yacht.
• No blackballing