Master P Seeks To Buy Reebok
Reebok may be getting a new owner, as its German sportswear parent company Adidas looks to offload the household name brand. Once a cultural icon of epic proportions, Reebok has struggled in recent years to gain a foothold with today’s trendsetters and tastemakers. This could be changing as new buyers including a business dream team of hip-hop business mogul, Percy “Master P” Miller and former NBA All-Star Baron Davis are looking to acquire the company, which could garner an asking price of around $2.4 billion. Is it time for the culture to take ownership of some of the products it helped to cultivate?
The Breakdown You Need To Know:
Back in 2005, Adidas bought Reebok aiming to take on U.S. arch rival Nike NKE +0.6%on its home turf, but failed to understand the culture it wanted to impact, according to CultureBanx. Then in late October, reports surfaced that Adidas was reportedly looking to shed Reebok, 14 years after acquiring the brand that was founded in 1958 for $3.8 billion. Last year, however, Adidas wrote down Reebok’s book value by nearly half compared with 2018, to 842 million euros ($995 million).
This is why having culturally astute business minds like Miller and Davis who aptly intersect music, sports and culture can be a major win for Reebok’s turnaround strategy. The company actually pioneered the idea of signing rappers to shoe deals in the same way athletes were. Sean “Jay-Z” Carter signed with Reebok back in 2003 and dropped the S. Carter shoes. In 2004, Reebok’s U.S. footwear sales grew by 17%, due in large part to its continued investment in hip-hop. So it’s plausible that Miller and Davis could even change the wealth paradigm through investing in a major sportswear brand, and providing opportunities that didn’t exist before in the Black community.
Remember that sneakers by rappers like Kanye West, Drake and Pharrell with companies including Nike and Adidas have created a consumer frenzy, as these influencers dictate business and trends. Cultural endorsers have basically usurped athletes as the go-to tastemakers in the sneaker industry. Hip hop artists have gone from subtle co-signers who helped start grassroots movements, to indirect ad men, to power brokers. Reebok’s latest cultural influencers to head up its roster include rap sensations Cardi B and Kendrick Lamar.
Cultural Commodities:
The market for resale sneakers and streetwear in North America is projected to reach $6 billion by 2025, according to Cowen. Sneakers have become coveted consumer goods and tradable commodities with “sneakerheads” around the world regarding them as investment assets. It’s imperative that Reebok is able to claim a bigger piece of this market.
