By Ellen Emmerentze Jervell
FRANKFURT--Adidas AG on Friday sold its Rockport unit for $280
million to a new entity formed by Berkshire Partners and New
Balance, in a move that allows the group to focus more on sporting
goods but hurts full-year profit.
However, the German company said that full-year net profit,
excluding the impact of the deal and a EUR80 million ($90.9
million) write down on the value of its Russian business, reached
its earnings target of around EUR650 million. It added that group
sales for 2014 increased 6%, adjusted for currency fluctuations and
the sale of Rockport. The company is due to report full-year
results on March 5.
Adidas has been looking to sell its Rockport unit, a maker of
boat and dress shoes, as it narrows its focus on sporting goods.
The sale, which is expected to be completed later this year, will
hit profit by a double-digit million euros amount, the company
said.
Rockport was acquired by Adidas when it bought Reebok in 2006
but the company has more recently said the brand's products don't
match its sports-oriented agenda. In May last year, Adidas Chief
Executive Herbert Hainer said the company was considering offers
for the unit.
"The brown shoe category is not core to this strategy and the
sale of Rockport will allow us to reduce complexity and pursue our
target consumer more aggressively," Mr. Hainer said in a statement
Friday.
In the first nine months of 2014, Rockport sales increased 5% on
a currency neutral basis.
The sale of Rockport comes as the world's No. 2 sports-gear
maker has struggled of late because of a weaker Russian ruble and a
slide at its golf division, TaylorMade-Adidas Golf.
Since September 2013, Adidas has issued three profit warnings
and its share price has plunged about 40%.
Reebok, the company's longtime problem child, recorded its
seventh consecutive quarter of growth in the fourth quarter of
2014. Its currency-adjusted sales rose 5%. Adidas has recently
repositioned Reebok as a fitness brand.
In October, The Wall Street Journal reported that a consortium
of investors from Hong Kong and Abu Dhabi was looking to buy Reebok
for about EUR1.5 billion. Adidas hasn't commented on the bid.
Write to Ellen Emmerentze Jervell at ellen.jervell@wsj.com
Corrections & Amplifications
Adidas sold its Rockport unit for $280 million. Earlier versions
of this story misstated the amount as EUR250 million and $250
million.
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