Last week, the Three Stripes Brand presented its preliminary results for its business year in 2022, and unfortunately, things are not looking good at adi. Meanwhile, Beyoncé’s clothing line with adidas reportedly suffered from weak sales.
Let’s kick it off with the most recent developments surrounding the separation of adidas and Kanye West’s YEEZY brand and their partnership with Beyoncé’s IVY PARK, which could be ending after this year.
adidas loosing revenue from Yeezy fallout
The new CEO, Bjørn Gulden, recently announced that it could lose around R23 billion ($1.3 billion) in revenue and operating profit by $534 million this year if it can’t sell all their warehoused Yeezys.
adidas terminated its partnership with Kanye West last October following anti-Semitic comments.
Leading to adidas x YEEZY cutting ties, Kanye told adidas, “It’s going to cost you billions to keep me. It’s going to cost you billions to let me go.”
In its financial guidance for 2022, the German sportswear giant admitted that the company is not performing well.
“We are currently not performing the way we should”, said adidas CEO Bjørn Gulden.
He added “2023 will be a year of transition to set the base to again be a growing and profitable company. We will put full focus on the consumer, our athletes, our retail partners and our adidas employees. Together we will work on creating brand heat, improve our product engine, better serve our distribution and assure that adidas is a great and fun place to work. adidas has all the ingredients to be successful: A great brand, great people, fantastic partners and a global infrastructure second to none. We need to put the pieces back together again, but I am convinced that over time we will make adidas shine again. But we need some time.”
adidas IVY Park partnership
A recent report from The Wall Street Journal states that Beyoncé’s Ivy Park collaboration with Adidas has resulted in weak sales, which fell more than 50 percent in 2022 to around $40 million. This is far below Adidas’ revenue projections of $250 million.
Ivy Park recorded approximately $40 million in sales in 2022, a decline from the previous year’s $93 million. Meanwhile, Beyoncé continues to receive around $20 million in annual compensation.
According to sources cited by the WSJ, the contract between Beyoncé and Adidas is set to end after 2023, and Adidas execs have discussed the possibility of either pursuing the line or ending the partnership.
Adidas and Beyoncé launched their first IVY PARK collection in 2020 and have since rolled out additional collections each season.
The Queue at adidas Originals store (Sandton) for the 1st adidas x Ivy Park drop #adidasxIVYPARK pic.twitter.com/jRygq8GFHf
— YOMZANSI Sneakers (@yomzansisneaker) January 18, 2020
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