NEW YORK (TheStreet) -- The wraps are coming off Reebok's exclusive deal to outfit UFC fighters, an important part of the athletic apparel and footwear maker's strategy to stay relevant in a crowded market.
"We have totally focused the company on emerging sports, such as the sport of CrossFit, and obstacle training through our Reebok Spartan Race," Reebok Brand President Matt O'Toole said in an interview with TheStreet at the unveiling of the brand's first apparel line for UFC, or Ultimate Fighting Championship, mixed martial artists. "We are connecting with a consumer that is dedicated to a fit and healthy life."
So far, Reebok's focus on attire to be worn on a grueling run or in an intense CrossFit session seems to be paying dividends. Sales for Reebok have increased for eight consecutive quarters, following years of stumbling performance since Adidas (ADDYY) acquired the brand for $3.8 billion in 2005.
"It's definitely starting to pay off for them," said Katie Abel, global news director for Footwear News. But Abel cautioned that bigger names such as Nike (NKE) and Under Armour (UA) continue to dominate the athletic apparel space.
One other industry watcher was also cautiously optimistic on Reebok's turnaround. "We have not yet seen a turn in sales at retail, but my guess is Reebok is getting a lift in training, classic shoes and from their outlet stores," said NPD Group sports industry analyst Matt Powell. According to NPD Group data, despite Reebok's improving sales trend, it still has a scant 1% share of the U.S. sneaker market.
But Reebok could get another sales boost very soon as its exclusive UFC gear starts to hit the retail shelves.
At its next major fighting event held on July 11, UFC fighters will be sporting head-to-toe apparel and footwear from Reebok. The arrival of Reebok as a provider to the octagon has not been without its share of controversy. Opposition has mostly stemmed from upset UFC fighters who stand to lose lucrative sponsorship deals from lesser-known brands that would have to to be terminated because of the exclusive deal with Reebok. But at least one of UFC's biggest names believes in what Reebok has in mind.
"None of it's made for combat sports," UFC superstar Ronda Rousey said about women's fitness gear in general. Rousey, known for her quick decisions and aggressive fighting style, said the fit of the clothing she was wearing while competing was a major problem. "All of my wardrobe malfunctions occurred with Lululemon (LULU) stuff," she said. "This is the first time I have been able to have women's MMA (mixed martial arts) clothing and I don't have to worry about trying to make something else work in a situation it wasn't made for."
Better-fitting apparel for female workout enthusiasts by Reebok could help it gain sales from consumers who have been flocking to Nike and Under Armour. One item in particular, a UFC-inspired fitness bra, could be a hot seller to the female workout crowd.
UFC President Dana White said the days of fighters donning cluttered-looking apparel emblazoned with multiple sponsor logos is over. "The time is right," said White, who reaffirmed his belief that severing ties with outside sponsors in order to make UFC fighters appear more polished was correct.
Apart from the UFC, Reebok might also be contemplating a return to the days when now-retired basketball stars such as Shaquille O'Neal roamed the floor in Reebok high-top pumps. "A lot of our consumers play basketball, and we think our pump technology is a great solution for basketball, as it has been in the past, but reimagined," O'Toole said. "Stay tuned."
If Reebok releases what is tantamount to a "retro" basketball sneaker, backed by current NBA talent, it would play into a major theme in the sneaker industry. "The market for retro footwear is very hot," said Abel, echoing recent comments made by Finish Line's (FINL) CEO to TheStreet.