Aiming to move into its Boston offices in October, Reebok has started downsizing staff and relocating employees who work in shared services for parent company Adidas.
In an interview last week, Reebok brand president Matt O’Toole, global head of the Reebok brand, spoke of the company’s decision to pick up stakes from sleepy Canton, Mass., for the city’s buzzing Seaport neighborhood. The brand will be housed in the Innovation & Design Building. Located between downtown and South Boston in the Boston Marine Industrial Park, the I&D Building is near one of the largest dry docks in the country. Reebok’s 220,000-square-foot space is being built for 650 to 700 employees — about 300 fewer than its current team.
O’Toole said, “Picture this, we have 1,000 people here. Three hundred in some cases have no involvement with the Reebok brand, and in other cases have some shared responsibilities with Reebok and Adidas. Those folks are moving or their jobs are being eliminated, so we’re left in a pretty large facility with 700 people and that gave us the opportunity to start thinking about whether we wanted to stay in this area or go somewhere else.”
O’Toole declined to discuss the company’s investment in the move, or whether or not city officials offered tax incentives. Adidas-Salomon AG acquired Reebok International Ltd. for about $3.8 billion in 2005.
In addition to the Reebok brand team, the Canton headquarters includes corporate roles such as accounting, IT, finance, human resources and other Adidas group functions — about half of whom have been offered roles in other Adidas facilities primarily in Portland, Ore., or those roles have been eliminated. “That kind of created the impetus for us to think about a new location for the Reebok brand.” O’Toole said, adding that other staffers have been offered posts in Europe, South Carolina and Indianapolis.
Reebok hasn’t chosen a real estate broker to shop around its 460,000-square-foot facility that rests on 60 acres in Canton, but that is expected to happen this spring, O’Toole said. The company built upon a $13.5 million 42-acre purchase that was first made in 1996.
Canton officials learned about Reebok’s departure in the newspaper, according to Neponset Valley Chamber of Commerce president and chief executive officer Tom O’Rourke. Aside from impacting area restaurants, gas stations, convenience stores and a public ride-sharing program, the company’s pending departure prompted a developer to shelve plans for a nearby hotel he said. A Reebok spokesman said, “There was nothing that we did prior to the announcement. It was an announcement that no one expected so we kept it pretty tight about who knew about it.”
As a city with diehard sports fans, Boston and its suburbs is a hub for such athletic brands as Puma. Last year, New Balance and Converse relocated to more ramped-up headquarters, and Wolverine World Wide, the owner of Saucony, Keds and other brands, opened a new home office nearby last summer. In November, Under Armour unveiled a 19,000-square-foot, two-floor interactive store on Boylston Street next door to Gucci.
In the I&D Building, Reebok will have the opportunity to collaborate with other tenants such as Continuum, which it has worked with before, and potential new ones like Autodesk, which has a maker space on-site. O’Toole also said, “Part of Reebok’s attraction to the Seaport was the proximity to a large park and the water. We wanted to retain some of that ability to take the gym outside. The gym we’re building including the CrossFit gym we will equal the — totaling about 30,000 square feet.”
Regarding Reebok’s alliance with the UFC, O’Toole said, “It’s been good. We’re excited about the new ownership of the UFC with WME/IMG and [co-ceo] Ari Emanuel,” referring to this summer’s $4 billion acquisition, the largest franchise sale in sports history. They’ve brought a lot of excitement to the UFC.”
In the process of continuing to close outlet stores that are too big for the brand’s current range, O’Toole said those spaces were geared more for licensing deals with the NFL and the NBA. Meanwhile, with FitHub stores, the retail focus is shifting from mall locations to street ones. Noting deals with musicians like Future and Kendrick Lamar, O’Toole said, “We’re also working with people who are outside our athlete world with our sport business like the model Gigi Hadid. You’ll definitely see this movement into the broader world of pop culture and lifestyle as well.”