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Reebok To Sell Avia Subsidiary

January 18, 1996 GMT

STOUGHTON, Mass.(AP) _ Reebok International Ltd. announced Wednesday that it plans to sell its Avia subsidiary in order to focus on its core brands.

The Stoughton, Mass.-based athletic shoe and apparel company said its would take an after-tax charge of $34 million in the fourth quarter of 1995 from the sale.

Reebok’s move comes after a year of disappointing financial results, caused in part by low sales of its Reebok and Avia brands in the United States.

``Avia is a wonderful niche brand, but it’s competing against Reebok,″ said Kate Burnham, a Reebok spokeswoman.


Reebok acquired Avia, mainly a women’s athletic shoe company, in 1987, and will continue to support it until with capital and other resources until the sale is completed.

The after-tax charge, which is valued at 44 cents per share, will be recorded in the company’s fourth quarter figures, which will be released Jan. 30.

Reebok also reported that it now expects full-year 1995 income from operations to be in the range of $2.60 to $2.65 a share, which is slightly lower than previous estimates.

The company attributed the decrease to lower than expected gross margins resulting from their previously announced inventory reduction programs.

Following the announcement, Reebok stock slipped 75 cents, or 2.8 percent, to $26 a share on the New York Stock Exchange.

Reebok has about 5,000 employees, while Avia has about 200, most located in Portland, Oregon.

Burnham said she was not aware of any job cuts associated with the planned sale.