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How Reebok can restore its brand

Quartz logo Quartz 9/20/2021 Nitin Nohria
a person standing in front of a store: A man walks by a Reebok store in Bahrain. © Provided by Quartz A man walks by a Reebok store in Bahrain.

Earlier this summer, Fox launched a new version of Fantasy Island, the television show that first aired from 1977 to 1984. It’s one of the dozens of reboots in the works: the new version of Sex and the City is currently filming in New York, and the reprise of Gossip Girl premiered on HBO Max in July.

Even filmmakers like Steven Spielberg, known for their originality, cannot resist the lure of revisiting old hits: His remake of West Side Story will open in theaters on December 10.

The entertainment industry loves reboots for the same reason it relies so heavily on sequels and franchises. They arrive with built-in pre-awareness, and they can leverage a base of existing fans for success.

Outside of entertainment, corporations can take a lesson from this practice. What if older, long-neglected brands could be rebooted, taking advantage of hard-won name recognition and consumers’ nostalgia?

That’s part of the motivation driving the $2.5 billion acquisition of Reebok, the Boston-based footwear company, by Authentic Brands, a New York-based company that in the last several years has purchased a growing collection of legacy brands including Izod, Eddie Bauer, Barney’s New York, and Brooks Brothers.

When it comes to Reebok, I have a rooting interest. When I began my career as a professor at Harvard Business School more than 30 years ago, Reebok was one of the first companies I studied. I was interested in innovation-intensive companies, and Reebok provided a great case study. Under CEO Paul Fireman’s leadership, the company had developed a reputation for being a pioneer in the fast-growing sneaker industry.

Although younger consumers may lack awareness of it, Reebok has a proud history with deeper roots than industry behemoth Nike. The company traces its lineage back to 1895, when Joseph Foster, a 15-year-old British runner (whose grandfather was a cobbler), decided to compete in track events in homemade spiked running shoes, which he modeled after the footwear cricket players used. Foster went on to found J.W. Foster & Sons, a provincial maker of athletic footwear that limped along for decades until, in 1958, his grandson (also Joseph Foster) spun off a brand he called Reebok, a name he picked out of a dictionary. (It’s a type of antelope.)

During the original Fantasy Island’s run on ABC, Reebok began getting traction in the United States. In 1979, Runner’s World magazine began giving its shoes rave reviews. That’s when Paul Fireman met Foster at a trade show and secured the rights to drive the brand’s U.S. expansion, ultimately, in 1984, buying the parent company. Then, in the early 1980s, when Reebok’s California salesperson attended his wife’s aerobics class, he noticed how the women exercised barefoot—and how much their feet hurt afterward. In 1982, Reebok launched the first aerobics footwear, and the brand caught fire. Jane Fonda began wearing them in her workout videos, and by 1985, actress Cybill Shepherd (star of the hit show Moonlighting) was wearing orange Reebok high-tops to the Emmy Awards.

“While sales of our fitness gear soared, Nike, Adidas, and the others continued to sit back and watch, content in their belief that aerobics and the women’s fitness market was just a blip, a mere fad that was here today and would be gone in a flash tomorrow,” writes Reebok founder Joe Foster in his 2021 memoir Shoe Maker: The Untold Story of the British Family Firm that Became a Global Brand. “By the time they realized [women’s fitness] was here to stay, it was too late.”

Reebok remained a worthy rival to Nike through the 1990s, but by the early 2000s, it began to decline as the market shifted towards basketball-led high-performance shoes. In 2004, Fireman sold the brand to Adidas, where despite the German company’s efforts, the brand has continued to languish. By 2019 Reebok’s sales were roughly half what they’d been 15 years earlier—and by early 2021, Adidas had put the brand up for sale.

Reconnect, restructure, reimagine

It’s unclear whether Reebok’s new owner, Authentic Brands, will continue to hold Reebok as an operating unit that designs its products, or if it will license the Reebok brand to an outside company, as it has done with other acquisitions. (A Reebok spokesperson declined to comment; Authentic Brands did not reply to my email.)

Either way, what does the new owner need to do to reboot this storied brand?

Like successful movie reboots, it must reconnect the brand to its past while reimagining it for the present. The current success of athleisure brands like Lululemon and fitness brands like Peloton suggests there’s potential to create value by re-forging a link with customers looking for comfortable sneakers for their at-home workouts. Much like Reebok was in its heyday the brand of choice for followers of fitness icons like Jane Fonda, it has an opportunity to connect now with followers of popular Peloton instructors and social media fitness icons.

As much as Reebok has to reconnect with the product-market fit that defined the brand’s positioning in its glory years, it has to distance itself from its recent parentage and restructure itself to become a leaner, fitter, more nimble company. Small companies that get acquired and live under the roof of a large corporate parent, as Reebok has done under Adidas for more than a decade, tend to have fat that can be reduced. Even if its new operator keeps Reebok intact, there will be significant opportunities to reduce selling, general, and administrative (SG&A) expenses, corporate trappings like expensive real estate, and excessive staffing.

Its new operator must seek to reignite the entrepreneurial energy that once fueled Reebok’s success. It will need to reimagine a new organic growth “playbook” that can unlock value.

Potential elements of this new growth playbook can include:

  • Attracting more entrepreneurial talent to the company
  • Bringing in best-in-class digital marketing capabilities
  • Developing a powerful direct-to-consumer (D2C) playbook that leverages lessons learned from new shoe companies like On and even established competitors like Nike.
  • Combining this new D2C playbook with a powerful omnichannel strategy learned from companies like Warby Parker, etc.
  • Partnering with a platform like Peloton to launch shoes promoted by their most popular fitness instructors.
  • Transforming Reebok into a platform that, like Zara, enables “rapid” launches of new products.

To make Reebok a storied company again, its new owners need to Reconnect it with its brand heritage in the athleisure category, Restructure to make it lean and fit, and Reimagine a playbook that will enable Reebok to leverage new technologies and ways of doing business to reignite organic growth.

Hollywood has created tremendous value by “rebooting” old movies and TV shows. I hope old consumer brands like Reebok that we once loved can be rebooted as well.

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