Adidas AG on Friday slashed its long-term revenue forecast at Reebok International Ltd. as the Canton sneaker maker attempts to sharpen it focus on developing and selling fitness products.
The German company, which acquired Reebok in 2006, cut the 2015 sales target from about $3.9 billion to $2.6 billion — a larger drop than some analysts expected.
About one-third of the reduction is tied to football and hockey sales. Adidas cited Reebok’s loss of a contract to supply National Football League apparel, a change in the reporting of National Hockey League license sales, and efforts to improve efficiency.
Reebok is also making broader organizational changes to reflect the shift in direction. It has dedicated teams working on products in specific fitness categories, such as training, fitness running, studio, and walking, according to Dan Sarro, a Reebok spokesman.
The new category-specific structure “will provide better commercial opportunities as we turn the corner into 2013,” said Matt O’Toole, Reebok’s chief marketing officer, in statement.
Reebok has largely been a disappointment to Adidas since the takeover more than six years ago. The Canton retailer has seen a dramatic decline in its retail market share in the United States — from nearly 8 percent in 2005 to 4.6 percent in 2011, according to SportsOne Source, a sporting goods industry, research firm based in Charlotte, N.C.
Several weeks ago, Reebok shook up its management structure and eliminated the position of global president. Uli Becker, who was tapped in 2008 to lead Reebok’s business around the world, is now president of Reebok North America.
Analysts said the change reflects the company’s renewed concentration on improving Reebok’s performance in the United States.
“For Reebok to have a real place in the worldwide market, they first have to really establish themselves here,” said Matt Powell, an analyst with SportsOne Source. “To put an extra focus on the US and getting the US going in the right direction again is critical for them to be successful worldwide.”
Reebok will most likely trim its marketing expenses after overspending with product launches last year, according to Powell.
Sarro said the company wants to become more efficient and improve profits by aligning more with the Adidas structure, such as by using shared distribution centers, and creating more profitable footwear and apparel.
Sarro would not say whether the changes would result in job cuts.
“Instead of trying to be in lots of other businesses like basketball — which probably won’t be a priority moving forward — Reebok will focus its energies around training categories,” Powell said.