PARIS — Adidas said on Friday that it has entered into a definitive agreement to sell its U.S. sportswear clothing business Mitchell & Ness to a newly formed group principally owned by Juggernaut Capital Partners.
Terms of the deal were not disclosed, but Adidas said the transaction is expected to close in the second quarter of this year.
As a consequence of the transaction, Adidas Group will record a one-time positive P&L impact at the time of closing. The amount, which is anticipated to be in the low- to mid-double-digit million-euro range, is to be reported in other operating income as part of the company’s net income from continuing operations.
The Herzogenaurach, Germany-based group said it has opted to reinvest the divestiture’s proceeds to accelerate initiatives involved in the company’s “Creating the New” strategic business plan and that are aimed at helping to strengthen the platform for ongoing top- and bottom-line growth.
“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.”
Philadelphia-based Mitchell & Ness has had longstanding licensing agreements with sports leagues including the NBA, NHL, MLB and NFL.
Washington, D.C.-based Juggernaut Capital Partners includes a global executive team and strategic operating partners. It focuses on middle-market companies mostly in the consumer and business service sectors. It has committed capital of more than $725 million.
Adidas shed another activity earlier this month. The company and Chelsea Football Club parted ways after mutually agreeing to terminate their existing sponsorship deal prematurely, prompting the German sporting goods firm to increase its guidance for the 2016 fiscal year.