As Kommersant found out, the Russian division of the Reebok sporting goods chain, which announced the suspension of its work in Russia, was transferred to the Turkish holding FLO Retailing, which develops, in particular, U.S. Polo Assn., Lumberjack and Reno. Experts estimate the cost of more than 100 brand stores at about 1.5 billion rubles, but do not exclude that the transaction amount was three times less. It is now difficult for foreign companies to sell their business in the Russian Federation. But FLO gained control of Reebok outlets after signing an agreement with the chain to launch Reebok-branded products in Turkish factories for a number of countries.
The Reebok business in the Russian Federation was transferred to the Turkish FLO Retailing, one of the consultants in the retail real estate market told Kommersant. The interlocutor of Kommersant, close to FLO, confirmed that the deal had already been closed and, as a result, the company got more than 100 Reebok points of sale. According to him, the new owner intends to rename the stores while retaining the Reebok brand. FLO Retailing and Reebok did not respond to Kommersant's request.
FLO Retailing was founded in the early 1960s by Ahmet Ziylan and now operates in 21 countries. Manages shoe chains Flo, Sport in Street and the major German brand Reno. Owns U.S. Polo Assn., Kinetix, Polaris, Nine West, Lumberjack.
Since 2005, Reebok has been a part of Adidas structures, in March 2022 the brand was sold to the American Authentic Brands Group (ABG) for €2.1 billion. Russian market. ABG and Adidas also did not respond to Kommersant's request.
In Russia, Reebok is still controlled through Adidas LLC, whose revenue in 2021 amounted to 55.6 billion rubles, net profit - 3.9 billion rubles, follows from SPARK-Interfax. According to the 2GIS service, at least 117 Reebok mono-brand stores operate in major cities of the Russian Federation. Mikhail Burmistrov, CEO of Infoline-Analytics, estimates the cost of the network at 1.5 billion rubles, but does not rule out that the deal amounted to no more than 500 million rubles:
“It is extremely difficult to sell assets in Russia now. Reebok has found a partner that maintains business interests in Russia.”
As the Turkish edition of Yeni Safak reported on May 12, Reebok signed an agreement with FLO, under which the Turkish concern will produce brand products for 12 countries.
Mr. Burmistrov does not rule out that the deal to sell the Russian business to Reebok was structured on the terms of transferring the business to management with payments deferred in time. The general director of the Damat-Tween network in Russia, Emil Orujlu, also believes that the deal between Reebok and FLO was concluded at a discount. The previous owner of the brand, Adidas, considered its projects in Russia unsuccessful for a long time, he said.
FLO may use the acquired Reebok retail facilities to further develop its multi-brand stores, does not exclude the CEO of Fashion Consulting Group Anna Lebsak-Kleymans. In 2021, it was reported that the concern wants to enter the Russian market and develop here, in particular, the Kinetix, Polaris and Nine West brands.
amounted to, according to Euromonitor, clothing sales in 2021 worldwide.
One of the marketplaces told Kommersant that they continue to buy Reebok goods from the official distributor, they did not receive information about changing the supplier. An interlocutor of Kommersant from among large retailers said that large sports brands Adidas, Nike, Reebok stopped deliveries to Russia, stocks are now being sold, and in the future Russian chains intend to replace the departed brands with products of their own brands. There are no Western sanctions on the sale of mass-market clothing and footwear in the Russian Federation, so such goods will continue to be sold in the country, Anna Lebsak-Kleymans is sure. Distributors, according to her, only need to resolve issues with stable payments and arrange broken logistics.