Reebok is planning to layoff approximately 150 employees, most of whom are based in the brand’s Boston headquarters. The sport brand employees about 600 employees in Boston and 4,200 globally The layoffs will take effect during the final week of February, the same period Authentic Brands Group (ABG) is set of close on its purchase of the brand from Adidas.
The news was reported by The Boston Globe, which shared an internal email sent by Reebok President Peter O’Toole to employees. In the communication, he wrote, “It goes without saying that today has been a tough day, and knowing this day was coming does not make the reality of it any easier.”
O’Toole noted layoffs reflected ABG’s plans to adjust the brand’s current operating model. Adidas sold Reebok to ABG at a loss for approximately $2.5 billion. Never able to crack the code on the 64-year-old U.S.-based athletic brand, Adidas sold Reebok at a significant lost, having purchased in for $3.8 billion in 2005.
In advance of the closing, ABG has already made several announcements related to the deal. The company has tapped Sparc to manage Reebok’s U.S. licenses. Sparc is a joint effort between ABG and Simon Property Group and already manages licensing for Aéropostale, Brooks Brothers, Eddie Bauer, Forever 21, Lucky Brand and Nautica, among others. All told, ABG owns a portfolio of more than 30 brands
In addition to licensing, Sparc will also manage the newly-created Reebok Design Group (RDG), which will act as command central for all of Reebok’s design efforts. RDG will be based in Reebok’s Boston headquarters as lead by general manager of product, Todd Krinsky with O’Toole staying on as president.
In a recent interview with Axios, ABG CEO Jamie Salter predicted Reebok had the potential to grow from $4 billion in sales to $6 billion by 2023 and $10 billion in five years. Commenting on brand positioning, Salter added, “We’re going to focus very big on the classic entertainment fashion side and the other 50 percent on the athletic side.”.