Adidas could sell Reebok to Chinese rivals Anta Sports and Li Ning who are increasingly replacing the brands sales in China amid an ongoing boycott.
Adidas has launched the sale of Reebok, which it acquired in 2006 for $3.8 billion, in an auction in which it expects the Chinese rivals to put themselves forward as bidders, according to Reuters.
According to a recent report from financial services giant Morningstar, sales of both Adidas and Nike have plummeted on China’s largest ecommerce platform Tmall in recent weeks due to an ongoing national boycott of various western brands.
Adidas reportedly saw sales dive 78 per cent on Tmall, with Chinese turning instead to local alternatives Anta Sports and Li Ning.
While the Chinese sportswear giants are just two of the bidders expected to put themselves forward this week, alongside Fila, Wolverine, and financial investors TPG and Apollo, a sale to either could escalate tensions between Adidas and China.
Reebok saw net sales drop 16 per cent in 2020 to around $1.7 million, and the business is now valued at just $1.2 billion, meaning Adidas is due to lose billions on the sale.
Adidas’ investors have repeatedly called for a sale of the underperforming brand, which accounted for just 7.8 per cent of its net sales last year.
Despite the ongoing political situation, Adidas said last week it is confident the restart of big sporting events will drive a post-pandemic boom.
Adidas announced sales growing in the high-teens in 2021, beating March forecasts of mid-to-high teens growth, a jump of 50 per cent is also expected in its second quarter.