Forget the old Reebok — it's betting everything on fitness

It's coming back with a pitch nothing like Adidas's — but it can copy Adidas's playbook.

For the past 12 years Reebok has been a sad story — until Adidas, the company that bought it and then ran it further into the ground, tried to pull it back into public view.

On March 28, Reebok held a launch event for its "China plan" at Raw Fitness, a well-known multi-discipline gym in Beijing. Its global president and its Greater China general manager were both there. If all goes to plan, Reebok will open 50 stores this year and another 450 over the following two.

All of this closely mirrors how Adidas expanded and revived its own brand in China. Colin Currie, Adidas's Greater China managing director, who was also there, said Adidas would send Reebok people who know the Chinese market, offer marketing advice written for China, and help develop products for Chinese customers.

But Reebok is coming back with a pitch nothing like Adidas's. Back in 2010 and 2013 it signed deals with two niche fitness programs: CrossFit and Les Mills. Even those 500 stores get a name of their own — Reebok calls them FitHubs.

CrossFit is one of the fastest-growing fitness programs of recent years, high-intensity and cheap to run; more than 13,000 CrossFit gyms have opened worldwide over the past decade. Les Mills, a group-fitness system from New Zealand, also comes down to classes: any gym can apply to license the brand and teach Les Mills sessions on its own floor.

"Today matters enormously for the Reebok brand, because to be the best fitness brand in the world you first have to be the best fitness brand in China," Reebok global president Matthew O'Toole said at the launch.

The event itself was held two floors underground, in a gym near Beijing's Dawanglu that specializes in CrossFit and charges an annual membership "roughly twice" the going rate around it. For a long stretch of the afternoon, Reebok and Adidas executives and staff, reporters and partners all sat in the gym's CrossFit area listening to Wang Deshun — one of Reebok Greater China's three newest spokesmen — describe his own fitness career and, as a man who has been through it, fire up the young people in the room.

You can also watch the brand campaign Reebok has just released: Wang Deshun, who signed as a Reebok China spokesman two months ago, grinding away at his muscles on camera. The 81-year-old former mime went viral two years ago after walking a China Fashion Week runway bare-chested, and now carries the fashionable title "body artist." The actors Yuan Shanshan and Wu Lei come with fitness credentials too: Yuan drew attention online with the story of getting visible abs in 40 days and has 26 million Weibo followers; Wu, only 17, posts his workout photos on Weibo constantly, and the post announcing he had become a Reebok spokesman drew 380,000 likes. The new tagline is "Be More Human."

"This is a perfect moment. A fitness revolution is sweeping China and even the whole world," Matthew O'Toole told QDaily. The global fitness market is worth 80 billion euros today, he said, and the Chinese government plans to invest in sport and fitness with the aim of a 3 trillion yuan market by 2025. "We don't think of this as a niche market."

O'Toole would call that position the payoff from Reebok's turnaround, begun in 2010. Over the decade since 2007, Reebok's annual revenue grew in only four years and fell in all the rest; for the past four years it has barely grown in North America, its most important market, where its share has slid from 8% a decade ago to 2%, and rumors that Adidas would sell it off have surfaced again and again.

The Reebok that came out of that turnaround is happy to talk about its fitness history. It goes back to the 1970s, when a women's fitness shoe Reebok designed, the Freestyle, caught the North American aerobics wave and young women followed the Hollywood star Jane Fonda through their routines (in Matthew's words, "we really do have roots of success in fitness in our history"). By the 1980s and 90s Reebok was close to dominant in the fitness category. After tying up with CrossFit, Les Mills and others, it rolled out a product line for each over the past five years. Nike, by contrast, has found the CrossFit community very hard to enter — in 2015 it was even barred from appearing at the CrossFit Games.

Reebok's work on fitness culture in China began, roughly, with these partnerships too — and it happened while Reebok's retail business in China was shrinking. In 2013 someone posted online that Reebok's last counter in Wuhan would close at the end of the month.

At the same time, in gyms certified by CrossFit and Les Mills, a group of people were quietly falling for the brand. If you take fitness seriously, you may already have heard that a few small circles have redrawn the pecking order of workout gear: people in Reebok look down on people in Under Armour, and people in Under Armour look down on people in Nike and Adidas.

"I'm the kind of person who'll go all the way to Hangzhou to buy Reebok," said Mika Zhang, who works at an advertising agency in Shanghai and started taking Les Mills classes last year. "Once you take this class your whole way of living changes. You become very positive. It's like joining a cult."

Before he started these group classes, Mika says, he didn't mind working out in H&M now he insists on wearing the kit that matches the class, or he'll "look completely amateur." All told he has spent four to five thousand yuan on Reebok gear, and the Les Mills collaboration pieces cost about 20% to 30% more than Reebok's ordinary products.

"Do you know how terrifying it is for someone in advertising to get up early? The first class is at 7:30 a.m., which means I'm up at six — and I'm willing," Mika said. More than once in the interview he came back to the sense of togetherness, to how good the music in the classes is, and to how the classes let him "meet a lot of friends," all of them "positive people with jobs of their own." Because Reebok has no store in Shanghai, Mika recently made a special trip to Hangzhou to shop. "The salesperson added me to a WeChat group made up entirely of people who go to Hangzhou to buy Reebok — about a hundred of them."

Which is exactly the effect Matthew wants. "We want fitness to be a community activity."

Across the fitness world as a whole, though, Under Armour still sits at the top of the reputation ladder. Huang Mingxi still remembers that the first pair of basketball shoes he ever owned were Reeboks. He works at a foreign company in Beijing now and gets to the gym three times a week. "In the gym I'm an Under Armour fan… It's like, the guys who can really play soccer all wear Nike, and the guys who can really train all wear Under Armour."

Under Armour is speeding up its own store openings in China. In 2015 it said it would open 30 stores in the country within a single month, and its second-largest flagship in China opened in Changsha, Hunan, this January.

"I don't want to comment on competitors, but we think we have three things that matter," said Chad Wittman, Reebok's Greater China general manager, when asked what Reebok has over Under Armour. His three: good products, catering to the local market, and strong spokespeople.

That answer would work anywhere. But Reebok does have Adidas's playbook to copy.

Last October, Kasper Rorsted took over as Adidas Group's new chief executive, and the first plan he put forward was not about Adidas at all — it was about reviving Reebok. This "full overhaul of Reebok" includes a one-time investment of $33.4 million, moving Reebok's headquarters from Canton, Massachusetts, to Boston to make it more attractive to young employees, closing loss-making stores and half the outlets, and rebuilding a global brand team devoted to running Reebok.

Hit products matter too, of course. In October 2016 Reebok signed the well-known model, fitness devotee and internet celebrity Gigi Hadid as a global spokeswoman. After a limited-edition collaboration with the streetwear label Vetements, it followed quickly with a cheaper "Engine" version. And the Zoku Runner, a new line of Reebok classics that arrived in February, not only uses the knit upper everyone is using now but tells a story very close to Adidas's NMD: the design draws on three Reebok shoes from the 70s, 80s and 90s.

Reebok now puts footwear at the top of its investment priorities. Figures in Adidas Group's 2016 annual report show that 73% of Reebok's footwear sales last year came from products launched in 2016, and the company wants footwear to account for 25% of total sales by 2020.

"In April we're bringing out a new shoe that uses another cushioning technology from the company that makes the Boost sole," a salesperson at Reebok's Solana store in Beijing — one of the brand's eight stores in China — told a customer, Liu Xiaoyu. "We're in the same group as Adidas, so we share the technology."

The first half of that wasn't quite right: Adidas does not currently share Boost with Reebok. The running shoe coming in April is called the Reebok Floatride, and the Floatride Foam it uses is a cushioning technology Reebok holds under an exclusive contract — made by BASF, the same German company that produces the Boost sole.

The second half was right. "We're in the same group as Adidas" now looks like exactly the right strategy. Twelve years ago it looked like nothing of the sort.

Reebok was founded in Britain 122 years ago. Its founder, Joseph Foster, made the world's first spiked shoe for running. The brand peaked in the 1980s, built on basketball and running, and launched "the coolest shoe in the world," the Reebok Pump. In 1991, Dee Brown, a player Reebok sponsored, beat Michael Jordan on an NBA court wearing Pumps; before every game he inflated them by hand, and fans went wild for the ritual.

The Pump was a clever piece of technology. While everyone else was working on cushioning and midsoles, Reebok built a system that wrapped the upper — in plain terms, an air bladder added to the upper so the shoe hugged the instep and ankle, an Air Max for the top of the shoe.

Even today the Pump's bladder still looks fairly avant-garde, but on a professional court it is no longer as useful as it once was. Like Air Max, the Pump has stayed a fixture of sneaker culture and of countless limited-edition collaborations; through the years when Reebok went quiet in professional sport, it was more or less the only Reebok you could still find in a streetwear sneaker shop.

Through the first five years of the new millennium Reebok kept its momentum, signing three big sponsorship deals at once: the NBA, the NFL (the National Football League) and the NHL (the National Hockey League). Allen Iverson, signed in 2001, and Yao Ming, signed in 2003, are both big reasons people came to know the brand. But the DMX cushioning technology then failed and the marketing misfired, and Reebok drifted further and further from the high-end basketball market. In 2005 it accepted a $3.8 billion takeover by Adidas.

Almost as soon as the deal closed, Adidas took Reebok's NBA sponsorship for itself, signing an 11-year, $400 million contract with the league; the league, for its part, reckoned that a German company would be more useful for pushing the NBA in Europe and Asia. Five years later, in 2010, with its market share shrinking and its business sliding, Reebok could not hold on to the NFL contract either, and Nike signed it instead. By Citibank's count, the NFL money was substantial — at one point two-thirds of Reebok's total revenue.

Reebok vanished after that. The people who still remember it still tie it to basketball.

"Back in middle school and high school, if you lined the sports brands up, it was Nike and Adidas, then Reebok and Puma," said Huang Mingxi, who is 25.

Now Reebok and Adidas are trying to erase that history and get you to look at the fashionable fitness market instead — but to do it with Belle International, a group that knows local retail channels. Belle, which once held half the women's shoe market, is also the distributor for many sportswear brands, Nike and Adidas among them.

Ma Lei, deputy general manager of Topsports, Belle International's sporting-goods division, told QDaily that the store plan with Reebok has to meet two conditions: work down from the bigger cities, opening first in first- and second-tier ones; and, wherever possible, put stores next to Nike and Adidas. This year Belle will also open one or two stores with a CrossFit area inside — "shop floor in front, a CrossFit space of about 100 square meters in back."

In 2016 Reebok had just eight stores in Greater China and sales of $6.7 million, 3.8% of the brand's total revenue. The Floatride is likely to be its next high-margin product. For now the most expensive thing Reebok sells is still the Pump Fury, a streetwear shoe, and the Pump Plus training shoe it is pushing hardest has yet to cross the 1,000-yuan line.

Reebok's reach is still narrow and scattered. Even Mika, a new convert, points out that Reebok's clothes are ordinary quick-dry fabric: "Buying that much of it is purely a matter of faith." When QDaily visited a Reebok store in Beijing and asked people at random, most answers came down to the same thing — Reebok does nothing for them, whether or not they work out.

Even the choice of spokespeople is not the safe bet Greater China general manager Chad Wittman made it sound.

"I think it's absurd," Mika Zhang said at the end of the interview. "People who like Reebok don't like it because of them."

(Huang Mingxi is a pseudonym, at the interviewee's request.)

Cover image: Reebok