When adidas bought Reebok for $3.8 billion in 2005, it was thought that the merger would allow adidas to challenge Nike. It didn’t happen. What adidas found out was that Reebok had the NBA and NFL marketing deals, but didn’t really have any proprietary assets.
Four and half years later, the key -– adidas has discovered –- is to grow market share by developing new, innovative products.
In today's fourth quarter release, adidas said that Reebok sales in North America were up positively (4 percent) for the first time since the acquisition.
In fact, the Reebok name is now making such a good comeback that it soon might be stronger than when adidas bought them.
They went back to their roots as a shoe for women and developed the Easytone –- a shoe that is built to tone your body just by walking in it. In 2009, toning turned into a $300 million market and this year, toning shoes will hit $1 billion, according to Matt Powell, analyst for SportsOneSource, a sports market retail tracking firm. Powell says Reebok ended the year with a 31 percent market share in the toning category, but has been fiercely battling its only major competitor, Sketchers.
They not only built the right shoe for the fast growing segment, they also marketed it well. Here’s an ad that got significant viral traffic.
Reebok’s next product is something called the ZigTech and the folks at headquarters are calling this “an energy drink for your feet.” They say that the shoe causes up to 20 percent less wear and tear on key leg muscles.
“Reebok has a built a successful 1-2 punch with Easytone and now ZigTech,” said Jeff Hennion, chief marketing officer for Dick’s Sporting Goods, which partnered with Reebok to bring Easytone try-on trucks to the parking lots near its stores.
Hennion said his buyers are telling him that the ZigTech, which retails for $100 and hits stores on March 11, “really are different from what has been out there.”
As for the marketing of the ZigTech shoe, the folks at Reebok have really hit the viral button. Not only have they gotten Pauly D and Mike “The Situation” from Jersey Shore involved, they got Chuck Liddell and his girlfriend working out in the shoes naked. For its part, Reebok has smartly not confirmed that they shot the video and Liddell, while saying it was authentic, has said that he doesn't know either.
Update: Reebok responded to our request for comment about the Liddell video. "Reebok did not intend for ZigTechs to be worn without clothes," said John Lynch, Reebok's vice president of US merchandising and marketing. "With that being said, these shoes will give your legs some extra energy whether or not you are wearing pants."
Questions? Comments? SportsBiz@cnbc.com