Boston-based brand, Reebok is being sold to Authentic Brands Group (ABG) after years of existence under the German sportswear giant, Adidas. While Reebok is being acquired by ABG for about $2.5 billion, about 150 of its employees, primarily in Boston, Massachusetts, will be laid off.
By 28 February, when the acquisition by New York-based ABG is completed, the lay offs will also take effect.
Employees of the 4,200-strong workforce were informed of the decision by Matt O’Toole, president, Reebok, via an e-mail. It was made clear to the employees that the layoffs were necessary and in keeping with the new and totally different operating model and structure of ABG, a company that helps apparel, athletics, and entertainment companies sell their offerings.
Most of the senior management at Reebok will continue in their positions, and the brand will continue to be headquartered in Boston, where a 600-strong team operates.
Adidas had begun planning the sale of Reebok last year, after failing to make the brand profitable despite 15 years of working on it. The sale of Reebok to ABG, whose brand portfolio includes Eddie Bauer, Forever 21, and Nine West, was announced in August.
Meanwhile, ABG has entered into agreements in several countries for the sales management of Reebok. It is focussing on expanding the presence of the Reebok brand in North America and Europe.
In the US, Reebok will be licensed and operated by the SPARC Group — a joint venture of ABG and Simon Property Group.