Marketing 710 Reebok Research Invitation B Hee Gyu Oh
Reebok Recent Situation • World’s 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
Reebok Recent Situation (cont’d) • 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
Reebok Recent Situation (cont’d) • 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.
Revenue and Net Income million $ million $ ※ Nike (May, 2005) Revenue = $13,739 million ; Net income = $1,211 million
Adidas and Reebok ‘just do it’ targeting Nike Adidas will acquire Reebok in a friendly takeover. Reebok’s stock price jumped 30% in one day after Adidas announced the plans to buy Reebok 2005. 8 , Adidas-Reebok combination announced
Adidas-Reebok Merge ※ Brands will stay separate but complement each other.
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.
Reebok’s 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 life’s passion : golf • 1980s, he experienced blackballing (Jewish) • 1992, opened Willowbend Golf Club (open membership) • Opened 9 more golf clubs : worth $ 2 billion
Liberty National Golf Club • The world’s 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