Home Entrepreneurship Story of the British Billionaire Brand – Reebok

Story of the British Billionaire Brand – Reebok

by Keerat

Joe Foster, Founder – Reebok

Interview By Ninder Johal

This interview is also available in a Podcast on the Nachural YouTube Channel 

Podcast also available on Apple & Spotify

 

What I noticed first when the Zoom interview cranked into action was a huge smile and a pair of twinkling eyes. I was struck by the youthful energy of this great pioneering entrepreneur. He looked at ease and spoke with an incredibly soft voice ‘Hello Ninder’– the smile continued.

Dressed in a snazzy pink shirt, he was sitting in a bright room and appeared very comfortable with the technology in front of him.

I reminded him how I first came across him in an interview on Clubhouse (a social media app and the latest tech phenomena) and heard him speak about his journey. I admitted to not knowing that this fabulous business I had known about (or rather the brand) as I was growing up had emanated from Bolton and that I was keen to understand how a British family business had built a billion-pound global company that would compete with giants such as Nike, Adidas, and Puma.

Born in Bolton, he remembers a childhood spent during World War II and after a year in the family business ended up spending time in the Army. As for being a natural entrepreneur, he reflects that such a term (entrepreneur) did not exist in the 50’s and 60’s. He recalls that his experience as a Boy Scout and time in the Army gave him the organisation skills and self-reliant skills that became so important later.

The journey of Reebok starts with Joe’s grandfather who started the family shoe business as Fosters in 1900. He regarded his grandfather (whose name he shared) as the innovator and a pioneer when it came to understanding marketing and influencer marketing. His grandfather had built a cult following and was supplying all the football teams in England, but the business’s fortunes dipped upon his death.

The business had been passed onto his sons (Joe’s father and uncle). Hugely critical of the stewardship of the business and after many attempts to persuade the owners to change course, he and his brother Jeff left the family business and set up their own business.

‘When I questioned the strategy of the business, my father simply said – the business will be yours when I am dead – the trouble was the business would also be dead by the time this happened’.

 

Was it difficult leaving the family business and why not go alone – why leave with your older brother?

‘It was simple – my brother loved looking after production and left the rest to me – we never argued about anything and understood our separate roles – it was perfect. The early years were tough – everything was run on a shoestring and breaking into a market dominated by large brands was also proving to be difficult’.

‘Whenever I visited retailers – they would point to Adidas and Puma and say – why should I buy your product when I already have these – I always struggled to answer the ‘why’. Whilst we were doing ok – I was far too hungry – we had to scale to make a meaningful impact’.

 

 

The only way to scale was to look at a bigger market and produce a shoe (trainers) that could be marketed to a bigger market – we are ticking along in the UK, but I was too ambitious for this’.

 

So why the USA? I asked.

‘Whilst we had the European market next door to us – the culture and different legal jurisdictions made it difficult. Each country had a small market and a different language but, in the USA, – it was a huge single market and English was the only language and we also knew if we could crack the USA – we could then crack the rest of the world’. He remembers it being very tough.

‘Unlike today where we have Zoom – everything was done by flying across the waters – we did not have mobile phones or the internet’. The trips to the USA were largely attending exhibitions armed with product and business cards. He remembers fondly, trying to explain to the Americans of where England was – eventually agreeing that England was close to London!!!

It was also obvious that without distribution – the USA would remain elusive. The media landscape was so different where a few magazines controlled the exposure of brands and in order to secure distribution, he would have to produce a world class trainer and then somehow get rave reviews.

After 12 years, they eventually produced the world beating Aztec and secured distribution in the USA and finally the USA had heard of Reebok. But frustration remained – they needed something else – something much bigger to really disrupt the market. ‘This is when luck played a part’ admitted Foster.

‘We were really lucky that one of our reps spotted the emergence of the Aerobics market especially in the women’s market. There was nobody supplying this growing market. We made a couple of pairs – tested them and before we knew it – they were simply flying off the shelves. And of course, it helped that Jane Fonda = a well-known celebrity decided to wear them’.

 

 

I asked, how did the big boys (Adidas, Nike, and Puma) respond?

‘They never saw the market and as we were under the radar – nobody noticed. We also had an advantage that Nike and Adidas were seen as masculine orientated brands, but Reebok had no such baggage – we had the market to ourselves’.

‘Over 5 years we grew from 3m, 9m, 30m, 300m to 900 million dollars -!!!’.

 

I asked what were the painful issues whilst scaling?

‘It was not finance, it was not people or processes – our problem lay in meeting demand – we could not manufacture quickly enough. But this was where we had a second bit of luck. Nike had been struggling and cancelled their orders with their manufacturers in the Far East – this spare capacity was taken upon by us – we were so fortunate – if we had not managed to meet demand – it might have finished us off’.

By this stage – the Reebok brand was now globally known and having moved into apparel – it was now hitting $4 billion dollars annual revenues.

 

But Joe then walked away….  Why? I asked ….

‘The challenge was gone – I was surrounded by lawyers and accountants and now the emphasis was on data and numbers – it was time to move on and leave the business to a fresh team – it is important to know when your time is up…and my time was up.’

 

I asked him what he had learnt on this journey and how he managed to keep his work force in place in the early days when they were close to collapse due to cash flow issues.

‘Leadership is all about openness and transparency. If you are straight up with everyone then they will support you, even in difficult times. Business is quite simple – it’s all about people and many of the people stayed with us through thick and thin’

His new book – ‘The Shoemaker’ includes a chapter entitled ‘Who and what made a difference’.

 

I asked him why he felt he needed to write that.

‘It was important that readers understand that business is down to teamwork and people – as you scale that becomes even more important as complexity increases. That is when trust becomes important because you cannot do it alone.’

He emphasised the need for networking and that it was akin to the more people you meet the greater the chance to find opportunities to exploit and create your own luck. I moved onto the present and the future of Reebok particularly as part of Adidas.

 

What was the future of Reebok in this new world of sport I asked?

‘Sport will always be important – technology has allowed us to see sport like never before. We can now even see the seam of a cricket ball and of course sport is now a fashion industry with increasing importance of influencers’.

As the founder of Reebok – how did he feel about rumours that Adidas was now looking to divest itself of Reebok which it had bought back in 2006 for £3.1 billion and given his huge energy levels would he be in a position to assist? He responded with a smile and said he was not surprised by the rumours and that he would be willing to help if needed.

 

Finally, I asked him what advice he would give to entrepreneurs of today:

Start early, listen to others but make up your own mind and have a passion for your work.

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