Reebok India’s Operations Acquired By Aditya Birla Group: Why This Happened?
Aditya Birla Fashion & Retail (ABFRL) will take over Reebok’s operations in India.
Rights Under The Agreement
ABFRL has signed a long-term licensing agreement with Authentic Brands Group (ABG) to take on Reebok’s India operations.
The acquisition gives ABFRL exclusive online and offline rights to the global sportswear brand Reebok for the Indian market.
It will now distribute and sell Reebok products through wholesale, e-commerce and Reebok branded retail stores in India and other ASEAN (Southeast Asian) countries.
Spending Millions To Acquire Assets
The deal will be effective once the global ownership of the Reebok brand is transferred from Adidas to Authentic Brands Group under a $2.37 billion acquisition announced in August.
As part of the deal, it will also be buying certain assets of Reebok India Company, including inventory, current assets and liabilities.
It will spend around 750 million rupees ($9.88 million) to 1 billion rupees ($13.17 million) to buy Reebok`s inventory and other current assets and liabilities.
On A Shopping Spree
Its present portfolio includes lifestyle and formal wear brands such as Allen Solly, Louis Philippe, Peter England, Pantaloons, and VanHeusen.
It has been in a race to acquire several other brands, particularly those dealing in designer ethnic wear.
It acquired Shantanu & Nikhil’s apparel brand Finesse in 2019.
Then in Jan 2021 it acquired a 51 percent stake in bridal couture brand Sabyasachi, established by renowned designer Sabyasachi Mukherjee.
A month later it went on to acquire a 33 percent holding in Tarun Tahiliani’s ethnic wear label house.
Piece Of A Big Pie
The Reebok deal marks the company’s entry into the sports and activewear segment which is among the fastest growing fashion and apparel segments.
In India, the segment has seen a rise thanks to rising income levels, increased health consciousness and the adoption of active lifestyles by young Indians.
The trend towards athleisure and casual wear propelled the growth of the Sports active wear market in the last few years.
Chasing Market Growth
The segment has a bright future ahead with projections estimating it to grow to $13 billion by FY24 at an annual growth rate of about 14 percent.
ABFRL will collaborate with Reebok Design Group (RDG) on all product design, development, innovation, and creative direction to drive a unified brand voice and vision.
RDG is Reebok’s newly-established global brand hub based in Boston, US.