Aditya Birla Group to Take Over Reebok’s Operations in India: Why This Happened?
By Sanjay Maurya
Aditya Birla Group will take charge of reebok operations in India under a long-term license agreement with Authentic Brand Group. The strategic collaboration will provide Aditya Birla Fashion and Retail Ltd (ABFRL) the right to distribute and sell Reebok goods in India and other ASEAN countries through wholesale, e-commerce, and Reebok branded retail locations, according to a statement made on Tuesday (14th December 2021).
ABFRL has grown its portfolio into a powerhouse of brands across all-important fashion and lifestyle categories over the last several years, and this purchase is a significant step forward in that process. The purchase of Reebok, a well-known worldwide sports and sportswear brand, would “cover a significant gap in ABFRL’s portfolio, according to a news release.
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Aditya Birla Fashion and Retail |
Reebok |
| Owner: Aditya Birla Group | Founded: 1958, Bolton, United Kingdom |
| Headquarters: Mumbai | CEO: Matthew H. O’Toole (Sept 2012–) |
| Revenue: 5,249 crores INR (US$740 million, 2021) | Headquarters: Boston, Massachusetts, United States |
| Founded: 1997, India | Acquisition date: 31 January 2006 |
| Parent organization: Aditya Birla Group | Parent organizations: Adidas, Authentic Brands Group |
| Subsidiaries: Sabyasachi Couture Private limited, MORE | Subsidiaries: Jofa, Reebok Thailand, MORE |
The agreement marks ABFRL’s entrance into the sports and activewear market. According to the firm, the transfer of ownership of the Reebok brand from Adidas to Aditya Birla Group is planned to be completed in the first quarter of 2022. In recent years, this segment has been growing rapidly on the heels of rising income levels, increased health consciousness, and the adoption of active lifestyles by young Indians, the company said in a statement, adding that the segment is expected to grow to $13 billion by 2023-24, with a 14 percent annual growth rate.
Quick Glance
As Indians become more active, athletic, and health-conscious, their consumption of garments and accessories is projected to evolve in step with these trends, creating a potential to establish iconic brands of worldwide renown, said Ashish Dikshit, general director of ABFRL.
According to business intelligence firm Tofler, Reebok’s net sales in India fell 26% in FY21 to INR 321 crore, compared to FY20. During the fiscal year, the firm declared a net profit of INR 4.9 crore, down 93 percent from the previous year. According to Tofler, the company’s total costs for fiscal 2021 were INR 315 crore.
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