Adidas Agrees to Sell Mitchell & Ness
Adidas announced that it has agreed to sell Philadelphia-based sportswear company Mitchell & Ness in order to create budget space for a different strategy. Reuters reported that the buyer is a newly formed company primarily owned by Juggernaut Capital Partners, a U.S. private equity firm.
We spoke with Peter Capolino, who took over the original Mitchell & Ness company after his father, and formed the Mitchel & Ness Nostalgia Company in 1988. Capolino sold the company to Adidas in 2008.
"I think [Adidas selling Mitchell & Ness] was a very good thing for Mitchell & Ness," Capolino said. "Adidas is moving out of the pro licensing business, so they're no longer going to have the league licenses to support Mitchell & Ness in that realm. And I'm pretty sure that the new ownership group, they're really going to diversify Mitchell & Ness with some other product lines that might include footwear and other kinds of apparel."
"Mitchell & Ness is a strong lifestyle brand that is well known for its authentic headwear and apparel craftsmanship," Herbert Hainer, CEO of Adidas said in a statement. "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 consumers to live active lives. 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 target consumer more aggressively with our core brands."
The value of the sale was not disclosed, but Adidas said in the statement that it expects to record a one-time gain in the "low- to mid-double digital million Euro range," and will reinvest the proceeds from the deal into initiatives that are part of its "Creating the New" strategy.
"The Mitchell & Ness name, I think, crosses a lot of demographics," Capolino said. "It covers demographics that are hardcore sports fans, demographics that are casual sports fans, demographics that are people who are into music and hip-hop and rap, and then it's got a lot of young people who follow that core world music and also follow Mitchell & Ness.
"I look forward to seeing [Mitchell & Ness] getting bigger than ever," Capolino continued. "I don't have any formal affiliation with Mitchell & Ness at this time, but I'm hopeful they might want to consult with me or bring me back in some capacity that would link the roots of the company to where they are now."