Reebok‘s partnership landscape will soon look quite different.
In June, Reebok revealed to FN that its deal with CrossFit was coming to an end this year and it would not look to strike a new one. The athletic brand said this in an email statement after CrossFit’s then CEO Greg Glassman made an insensitive remark about George Floyd on Twitter.
And in July, the UFC stated combat sports apparel and accessory brand Venum will become its new exclusive global outfitting and apparel partner next year after its existing partnership with Reebok expires in March 2021. Reebok signed a six-year sponsorship deal with UFC in December 2014.
Both CrossFit and the UFC have massive followings, and Reebok over the years has grown synonymous with the sport and the fight promotion.
Despite this, The NPD Group senior sports industry adviser Matt Powell doesn’t believe Reebok will be in bad shape without their associations.
Watch on FN
“I don’t think they really had a material business around [CrossFit and UFC]. Certainly not in footwear, anyway,” Powell said. “It was an interesting idea to try to establish themselves as the training brand for more extreme training activities but it just never really manifested itself in sales. So I don’t see this having a massive negative impact on the brand.”
Specifically for CrossFit, Reebok developed its Nano footwear franchise — which is up to its 10th shoe — for the sport’s participants, although it is used by all types of fitness enthusiasts today. Powell believes any potential dent cutting ties with CrossFit could make to its training shoe business wouldn’t be significant.
Powell said sales in the training shoe category in 2019 were less than $1 billion, which was down 10% from 2018. In 2019, he explained that Reebok had a roughly 2.5% share of that market, and sales were down in the mid teens from the year prior.
However, Marc Beckman, founder and CEO of advertising agency DMA United, believes life without CrossFit and the UFC may produce some challenges.
“Reebok values these deals, particularly because the partnerships provide Reebok with a community that is young, fresh, relevant and comes with significant purchasing power,” Beckman said. “Initially, these alignments for Reebok were considered community building for brand positioning purposes. Since the launch, however, the affiliations have proved to be important for Reebok commercially. It is unfortunate that today’s economic climate has created a bumpy path for Reebok, CrossFit and the UFC. I acknowledge there are some social/cultural issues now as well.”
Despite the challenges, Beckman doesn’t think Reebok will be in bad shape when the deals are done. And he believes there are plenty of options for new partnerships.
“It is probably beneficial to Reebok that the two deals are ending. Present retail conditions presumably make the financial burden to Reebok onerous. Reebok can now renegotiate, and/or consider aligning with a platform or two that may be more relevant in a COVID environment. For example, at-home fitness.”
For Powell, Reebok shouldn’t spend money on more partnerships. Instead, he believes the brand should take that money and invest in product.
“I think the logic is to reinvest in the brand. There’s a great heritage story to tell there and they haven’t really got their fair share of the heritage business. They’ve actually started to get some traction around heritage, the product looks fresh on the floor and sales have got better there. I think this is a big opportunity for them.”
