ABFRL to take on Reebok’s Indian operations

Target Date - March 31, 2022

Aditya Birla Fashion & Retail Limited (ABFRL) has signed a long term licensing agreement with Authentic Brands Group (ABG), which grants ABFRL exclusive rights to distribute and sell Reebok products through wholesale, e-commerce and Reebok branded retail stores in India and other ASEAN countries.

Key points to note –

  • ABFRL has an existing relationship with ABG for it’s other brands e.g., Forever 21.
  • The aforesaid Reebok transaction will be effective upon the completed transfer of global ownership of ‘Reebok’ Brand from Adidas to ABG, which is expected to close in Q1 FY22.
  • The transaction entails takeover of inventory and other net current assets/ liabilities of Reebok India by ARFL at the time of transfer. Consideration for the same is expected to be Rs 75-100 crore (actual value might differ at the time of the closure).
  • Reebok India reported a turnover of Rs 429 crore in FY 20. Compared with this, ABFRL’s trailing twelve months turnover was Rs 6,613 crore.

Reebok is a solid brand and hopefully should do better in ABFRL’s basket. Sports footwear, apparel and accessories is a growing segment and with people’s greater focus on heath should continue to do well.

It seems a good catch by ABFRL.

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