The Adidas Group has set up a joint venture in Brazil fort he distribution of the Reebok brand in Brazil and Paraguay with Vulcabras. The financial details of the deal, which has yet to be approved by Brazilian authorities, are being kept confidential, but it shows one reason why Vulcabras took over last year Calçados Azaleia and its Olympikus brand of sports shoes.

With gross sales of 600 million reais (€220m-$340m) in Brazil and Argentina last year, the Reebok brand represented the biggest source of revenues for Vulcabras until it bought last Azaleia. The acquisition raised the company’s annual consolidated sales to more than 1.8 billion reais (€660m-$1.1bn). Its only other major activity was and remains the manufacture of safety boots in PVC.

In 2007, the group’s deliveries of sports shoes amounted to 11 million pairs for the Olympikus brand, which continues to be distributed for the most part in Brazil alone, 3.5 million pairs for Reebok in Brazil and 2.3 million pairs for Reebok in Argentina.

The Adidas Group has also started negotiations with Vulcabras on a joint venture operation for Reebok in Argentina, where the Brazilian company recently bought a large shoe manufacturing factory to service the market with locally produced Reebok and Olympikus sports shoes, due to the country’s import quotas on such products.

Vulcabras, whose sales have been growing at a compound annual rate of 30 percent for the past five years, is now determined to expand the international presence of Olympikus, starting first in Argentina, where over 1.5 million pairs should be sold this year, and with other Latin American countries soon after. Milton Cardoso, chief executive of Vulcabras and current chairman of Abicalçados, indicated that the now integrated group is not planning to return to the European market with this brand before about five years’ time.

Pedro Grendene Bartelle, chairman of Vulcabras, will be the chairman and president of Adidas’ new Brazilian joint venture. His son Pedro Bartelle recently became marketing manager of the Vulcabras group. He and his brother Alexandre together own more than 70 percent of Grendene, the large publicly listed Brazilian supplier of thongs and other shoes trading under brand names such as Rider, Grendha, Ipanema and Melissa (more in Sporting Goods Intelligence Europe).