The reebok outlet Company’s sales represented

The reebok outlet sales decline in U.S. branded apparel was the result of lower off-price and closeout sales. For 2004, the Company focused its efforts for U.S. branded apparel on the quality rather than the quantity of this business, both in terms of product line and in terms of the channels in which the products are sold. Thereebok outletCompany believes that the U.S. branded apparel business is a significant long-term growth opportunity. Sales of the Company’s sports licensed apparel business, which is a key component of its performance platform, increased as compared to 2003.

During 2004, sales of both NFL and NBA branded products increased when compared to the prior year. Fan-based licensed apparel experienced double digit sales growth for 2004 in sporting goods, team shops, specialty licensed shops and better and moderate department stores. While sales of licensed apparel products to athletic specialty retailers did decline for the year as the business moved to a more fan-based model. International sales of the Reebok Brand (including reebok  footwear outlet and apparel) were $1.547 billion in 2004, an increase of 17.3% from sales of $1.319 billion in 2003.

The reebok outlet Company’s sales represented $111.6 million, or approximately 48.9%, of the sales increase. International footwear sales increased 17.5% and international apparel sales increased by 17.0%. Changes in foreign currency have favorably impacted these comparisons. On a constant dollar basis, international sales of the Reebok Brand increased $121.2 million, or 8.5%, international footwear sales increased by approximately 9.5% and international apparel sales increased by approximately 7.4%. In constant dollars, sales increased in many European countries including Austria, Germany, Holland, Poland, Russia and Switzerland whereas sales declined in the U.K., France, Spain and Italy.