Thursday, March 09, 2006

Reebok hits the Street

Adidas , the German sporting goods company recently acquired their US rival Reebok at a record $3.8 billion (US) acquisition. Despite this Adidas-Salomon AG , the world's second-largest sporting-goods maker posted a fourth-quarter loss because of the cost of integrating Reebok International Ltd . and marketing expenses for the FIFA World Cup soccer tournament. US sales of athletic footwear rose just 2.8 per cent in 2005 to $11.5bn, according to the NPD Group . The challenge for Adidas and rival Nike is to find ways to increase revenue in a mature market. Experts believe growth in the athletic footwear market would come from a combination of fashion and technology. Over the coming months Adidas and Nike will go head-to-head as they compete to sell products related to the Commonwealth Games and the FIFA World Cup 2006. In Europe, Adidas benefited as retailers stepped up orders for World Cup match balls , Predator and F50+ soccer boots and team jerseys for Germany, France and Argentina. Reebok has traditionally emphasised casual footwear but their parent company now intend to reposition Reebok as a performance brand. Endorsement deals with rappers Jay-Z , 50 Cent and Pharrell Williams have given the Reebok brand broad appeal among the more fashion-conscious urban consumers. Now the company are further bonding sports with music by sponsoring a musical event in New York’s Marquee which brought together the newest faces of Rbk entertainment, Nelly , Daddy Yankee , Mike Jones , Lupe Fiasco and many more. The event, Rbk: Now Playing showcased the breadth of Rbk's roster of cultural icons, not to mention they were all be invited to wear the product.
Nelly's signature collection of footwear, apparel and accessories will be called "Derrty One," inspired by his music label, Derrty Entertainment. Daddy Yankee will have a signature collection of footwear, apparel and accessories called "Daddy Yankee." Mike Jones, Lupe Fiasco and Lil' Wayne wore Reebok's new "Rbk OG" collection , a versatile line showcasing Mike Jones' street-inspired style, Lil' Wayne's on-trend look, and Lupe Fiasco's skate style. Pharrell debuted his new line of "Ice Cream" footwear in the spring, a line of skate-inspired and fashion-forward shoes. 50 Cent's "G- Unit" and Jay-Z's "S. Carter," have been among the strongest selling footwear lines in the market. In addition to having authentic new collections, Nelly, Daddy Yankee, Mike Jones and Lupe Fiasco will be featured in Reebok's "I Am What I Am" global advertising campaign. The "I Am What I Am'" campaign celebrates contemporary heroes of today's global youth, including music icons, athletes and entertainers. The four artists will be the newest members to join the brand's "I Am What I Am" family which includes 50 Cent, Jay-Z, Pharrell, Maggie Gyllenhaal, Donovan McNabb, Allen Iverson, Yao Ming, Nicole Vaidisova, Miri Ben-Ari, Christina Ricci, Stevie Williams and many more. Adidas and Reebok will maintain separate brand identities and want to compete at the market place. Adidas may position Reebok as a lower-price brand in an effort to mark a distinction between the two. Adidas anticipates Reebok will achieve 2.8 billion euros in sales for the remaining months of 2006.

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