- Adidas will end its partnership with Beyoncé before the end of the year due to a 50% decline in sales of Ivy Park, the artist’s brand, which the company estimated would reach $245 million in sales.
- Adidas’ new CEO, Bjørn Gulden, appears to be uninterested in working with Beyoncé’s brand.
- Adidas also ended its nearly decade-long partnership with Kanye West, which affected its estimates for this fiscal year. The company is looking to maintain its profitability in this new fiscal year.
The German company and Beyoncé will go their separate ways. It will be before the end of 2023.
The collaboration (which was not successful) was centered on Ivy Park, Beyoncé’s brand that the influencer had launched in 2016.
For two years the artist had an agreement with the American firm Topshop, but then Beyoncé acquired the whole of Ivy Park in 2018 and then signed with Adidas.
A year later, the second most important multinational in sports apparel after Nike, agreed with the singer with the aim of designing clothing and footwear together, something that will remain only until this 2023.
what happened? Adidas cut its sales in half on the Ivy Park brand over the past year, going from earning more than $90 million in 2021 to just $39 million in the last fiscal year.
Adidas and Beyoncé: a farewell announced
Thus, the collaboration between Adidas and Beyoncé with a collection called Park Trail, launched in January, which will include athletic footwear, apparel and sports accessories, will be the last between the two.
Adidas, one of the largest companies in its sector by revenue, achieved $39 million in sales with the Ivy Park brand last year, down 50 percent from the previous year, which had exceeded $90 million. The problem is that the German estimated sales of more than $245 million for Beyoncé’s label. A real disaster.
After these numbers (bad, very bad), Adidas announced that the contract with the artist from Houston, Texas, will end this year.
Adidas has a new CEO: Bjørn Gulden, who joined the company at the end of 2022, coming from Puma. The new CEO apparently wants nothing to do with Beyoncé’s brand.
Before Beyoncé, Kanye West
The Herzogenaurach, Germany-based company, which has already collaborated with several American celebrities, ended its deal with Kanye West at the end of 2022, after almost a decade working together developing the Yeezy sneaker collection.
The termination of this collaboration, which was very important for the company’s positioning in the U.S., led Adidas to lower its estimates for the current fiscal year several times.
Overall, Adidas ended the last fiscal year (which ended September 30) with a 7.7 percent increase in revenue, although it decreased its net profit by 41 percent.
In the third three months alone, the German company’s sales were up 12 percent, and net profit was down 63 percent.
For this new fiscal year, Adidas is looking for only one thing: to maintain its profitability.
Partnerships and results
Adidas has been recognized for its innovative products, iconic designs and, in recent years, the power of collaborations to drive its growth and have a major impact on the fashion and sportswear industry.
These collaborations have not only propelled Adidas to new heights (fighting on par with Nike), but have also reshaped the sports fashion landscape, appealing to consumers, athletes and enthusiasts alike.
Adidas has partnered with a wide range of individuals, brands and organizations to create unique, limited-edition collections that capture the attention of consumers around the world.
One of the most notable collaborations in recent years was the one it forged with Kanye West, which resulted in the highly coveted “Yeezy” sneaker line, but we’ve talked about that before on Investor Times.
In addition to Kanye West, Adidas has also collaborated with other celebrities such as Pharrell Williams and Alexander Wang, as well as well-known fashion brands such as Alexander McQueen and Parley for the Oceans, a non-profit organization focused on ocean conservation.
These collaborations have not only brought new perspectives and creativity to Adidas products, but have also expanded the brand’s reach to diverse consumer segments, resulting in increased sales and brand loyalty.
All of this ultimately means more revenue, more profit, more valuation and more company performance for its investors.
Adidas and the NBA
In addition to celebrities and fashion brands, Adidas has also partnered with sports organizations and athletes to create specialized collections.
One of the most successful is the partnership with the National Basketball Association (NBA) to design jerseys and team apparel, capitalizing on the worldwide popularity of basketball. Adidas has also worked closely with soccer clubs such as Manchester United and Real Madrid, as well as star players such as Lionel Messi, to create exclusive collections that cater to soccer fans around the world.
These collaborations have helped Adidas establish itself as a leader in the sportswear market and solidify its brand image.
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