Adidas selling Mitchell & Ness
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Business
Adidas announced on Friday, they are entering an agreement to sell U.S. sportswear clothing like Mitchell & Ness to a newly formed group owned by Juggernaut Capital Partners.
While terms of the deal are not being disclosed, Adidas said the deal should close by the end of second quarter.
As a result of the transaction, Adidas Group will record a one-time positive P&L impact at the time of closing. The amount is anticipated to be in the low-to mid-double million-euro range. It will be reported in other operating income as part of the company's net income from continuing operations.
“Mitchell & Ness is a strong lifestyle brand that is well-known for its authentic headwear and apparel craftsmanship. However, our focus is more on performance sport and operating a brand portfolio with a clear agenda to unleash the potential of athletes and inspire consumer to live active lives,” stated Herbert Hainer, chief executive officer of Adidas Group. “Nostalgia headwear and apparel is not core to this strategy, and the sale of Mitchell & Ness will allow us to reduce complexity and pursue our core target consumer more aggressively with our core brands.”
Mitchel & Ness has had a long standing agreement with sports organizations like the NFL, NHL, MLB, and NBA.
Juggernaut Capital Partners focuses on middle-market companies mostly in the consumer and business service sectors. It's committed capital is over 725 million dollars.
Recently, Adidas also prematurely terminated their partnership with Chelsea Football Club. The end of the agreement was mutual, but the German sporting goods firm has had to increase its guidance for fiscal year 2016.