NEW YORK — Reebok has outlined aggressive plans to grow its business and improve margins, including an increased focus on its women’s merchandise.
In a meeting with analysts at its headquarters at Canton, Mass., the athletic giant last week targeted six primary goals to “achieve double-digit profit margins by 2008,” according to a research report from John Shanley, a Susquehanna Financial Group analyst who attended the event. In 2004, Reebok earned $192.4 million, or $3.05 a share, up 26 percent from $157 million, or $2.43 a share.
The goals include improving gross margins, operational efficiencies and cash flow while buying back more shares. The company also said it is seeking to improve its market share across all product segments in the U.S. and abroad.
David Baxter, president of global apparel, said Reebok will aggressively push to add women’s merchandise to its licensed professional product lineup. Forty percent of all spectators at NFL games are female, while 20 percent of the people at NBA games are female, he said. Although the company does not break out sales of its licensed pro products, Baxter said the women’s merchandise in this business segment represents about 25 percent of sales. Reebok is the official apparel supplier for the NFL and NBA.
Steve Gardner, vice president of lifestyle footwear, noted that Reebok is in discussions with several music celebrities and expects to ink endorsement deals with five or six of them shortly to augment its popular Jay-Z and 50 Cent product lines, according to Shanley’s note.
The firm has 7,000 athletes under endorsement contracts, and has 40 teams under license agreements and expects to add more soon.
Shanley also wrote that Paul Fireman, chief executive officer, said the company is striving to create a “pull” strategy for the Reebok brand in the U.S. The focus of marketing and product development will be to create demand for items that consumers want, which will necessitate long-term marketing, product development and sales efforts that will likely take four to five years to be fully implemented, Fireman told analysts.