Sports-fashion retailer adidas has confirmed its plans to sell Reebok.

adidas purchased the sports brand in 2006 for $3.8 billion; it’s now thought to be worth around just $1.2 billion.

The company said that it wants to focus on “strengthening” the adidas brand in the global sporting goods market.

adidas said that the implementation of Reebok’s Muscle Up “turnaround plan” in 2016 meant the it was “able to significantly improve its growth and profitability prospects” and that this has laid the foundation for the sports brand “to unleash its full potential” in the sporting goods market.

The plan was key to the brand returning to profitability, but Reebok’s sales have been impacted significantly by the pandemic.

The brand saw sales drop by 44 per cent in the second quarter of 2020, while it saw a 7 per cent sales decline in the third quarter of last year to around $488 million.

Adidas will report Reebok as discontinued operations from the first quarter of 2021 onwards.

“The long-term growth opportunities in our industry are highly attractive, particularly for iconic sports brands,” said adidas chief executive Kasper Rorsted. “After careful consideration, we have come to the conclusion that Reebok and adidas will be able to significantly better realize their growth potential independently of each other. We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it.”

The retailer said that it would reveal more about its strategic business plan for the next four years next month.

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